IMPLICATIONS OF THE DOHA DECLARATION ON Carlos M. Correa

IMPLICATIONS OF THE DOHA DECLARATION ON
THE TRIPS AGREEMENT AND PUBLIC HEALTH
Carlos M. Correa
University of Buenos Aires
June 2002
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Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Table of contents
Table of contents
Foreword ..................................................................................................................i
Acknowledgements.............................................................................................. iii
Abbreviations and acronyms .................................................................................v
Executive summary.............................................................................................. vii
Introduction ............................................................................................................1
Scope .......................................................................................................................5
The role of TRIPS and IPRs ...................................................................................7
Public health measures ..........................................................................................9
Option 1 .................................................................................................................10
Option 2 .................................................................................................................10
Flexibility in TRIPS ..............................................................................................13
Interpretation .........................................................................................................14
Compulsory licences..............................................................................................15
Emergency.............................................................................................................16
Exhaustion .............................................................................................................17
Members with insufficient or no manufacturing capacities ..............................19
Addressed problem ...............................................................................................20
Possible approaches...............................................................................................25
(a) Article 31 (f)...............................................................................................27
(b) Article 30 ...................................................................................................28
(c) Moratorium ...............................................................................................30
Safeguards .............................................................................................................32
Compulsory licence in the importing country ......................................................32
Economic feasibility...............................................................................................33
Legal implementation............................................................................................34
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Transfer of technology to LDCs...........................................................................36
Extension of transitional period for LDCs..........................................................38
Special treatment under TRIPS ...........................................................................42
Legal status of the Doha Declaration ..................................................................44
Issues not covered in the Declaration..................................................................46
Conclusions...........................................................................................................48
Annex 1 Doha Declaration on the TRIPS Agreement and Public Health.........50
Annex 2 Levels of development of pharmaceutical industry, by country.........52
References .............................................................................................................54
Foreword
Foreword
The Doha Declaration on the TRIPS Agreement and Public Health, adopted by the
WTO Ministerial Conference in November 2001, which affirms that the TRIPS
Agreement should be interpreted and implemented so as to protect public health and
promote access to medicines for all, marked a watershed in international trade
demonstrating that a rules-based trading system should be compatible with public
health interests. The Declaration enshrines the principle WHO has publicly
advocated and advanced over the last four years, namely the reaffirmation of the
right of WTO Members to make full use of the safeguard provisions of the TRIPS
Agreement to protect public health and enhance access to medicines.
Article 31 (f) of the TRIPS Agreement stipulates that a compulsory licence must be
issued predominantly for the supply of the domestic market of the Member granting
the licence. Consequently, many countries without a significant pharmaceutical
sector have not been able to take advantage of the compulsory licensing provisions of
TRIPS. Although Members may issue compulsory licences for importation, they are
restricted to importing goods from countries where pharmaceuticals are not
patented, or where their term of protection has expired. As the sources for generic
production of newer life saving drugs will increasingly run out after 2005, resolving
this problem is of extreme importance to Members’ efforts to secure access to
affordable medicines to address public health needs.
Consequently, Paragraph 6 of the Doha Declaration instructs the Council for TRIPS
to find an expeditious solution to the problem faced by countries with insufficient or
no adequate pharmaceutical production capacity in making effective use of the
compulsory licensing provisions of the TRIPS Agreement. To this end, WHO has
publicly stated its commitment (WTO Council for TRIPS, 5-7 March 2002) to support
WTO Members and the TRIPS Council in whatever way they wish to find an
expeditious solution to this problem.
Shortly after the Doha Ministerial, WHO/EDM commissioned Professor Carlos
Correa (University of Buenos Aires) to write a paper examining the public health
implications of the Doha Declaration. This paper: (1) provides an overview of the
Declaration’s antecedents, (2) offers a general treatment of the Declaration’s
provisions, (3) provides guidance to WTO Members in finding an expeditious
solution by presenting possible options WTO Members may consider in resolving the
problem posed in Paragraph 6 of the Declaration, and (4) discusses related issues not
covered in the Declaration.
i
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Professor Correa is the Director of the Masters Programme on Science and
Technology Policy and Management at the University of Buenos Aires. He is an
internationally recognized professor, lawyer, economist and former Undersecretary
of State for Informatics and Development for Argentina. He is currently serving on
the UK Commission on Intellectual Property Rights. In 1999 he received an
achievement award by The Economist. He was involved in the negotiations on TRIPS
during the Uruguay Round and has since focused much of his professional work on
examining questions concerning the global intellectual property regime. He has
worked extensively on intellectual property issues as a consultant to UNCTAD,
UNDP, and WHO.
ii
Acknowledgements
Acknowledgements
This paper has been produced with the support of the Department of Essential Drugs
and Medicines Policy (EDM) of the World Health Organization (WHO). An expert
consultation organized by the Rockefeller Foundation and WHO/EDM was held on
10 June 2002 in New York. The author wishes to acknowledge the valuable
comments and input made by the participants at the expert consultation which
included: Nick Drager, WHO/Strategy Unit, Office of the Director-General;
Desmond Johns, Joint United Nations Programme on HIV/AIDS; Jim Keon, The
Canadian Drug Manufacturers Association; Heinz Klug, University of Wisconsin;
Sisule Fredrick Musungu, South Centre; Jonathan D. Quick WHO/EDM; Pedro
Roffe, United Nations Conference on Trade and Development; Jorgen Smith,
Norwegian Patent Office; Germán Velásquez, WHO/EDM; and Robert Weissman,
Essential Information; as well as for the comments made by Robert Howse
(University of Michigan) and Adrian Otten (World Trade Organization).
Although participants in the review process brought different perspectives to the
table, all reviewers, by consensus, agreed that this paper advanced ideas consistent
with the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and
Public Health.
Any views expressed are the views of the author and do not necessarily reflect the
views of the World Health Organization or the Rockefeller Foundation. The author,
is solely responsible for the opinions expressed herein.
This document has been edited by Robert Weissman.
iii
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
iv
Abbreviations and acronyms
Abbreviations and acronyms
ARIPO
DSU
EC
EMR
EU
GATT
IIPI
IPRs
LDCs
MFN
OAPI
SPS
TBT
TRIPS
UNCTAD
UNDP
WHO
WTO
African Regional Industrial Property Organization
Understanding on Rules and Procedures Governing the Settlement
of Disputes
European Commission
Exclusive Marketing Rights
European Union
General Agreement on Tariffs and Trade
International Intellectual Property Institute
Intellectual property rights
Least developed countries
Most-favoured-nation
Organisation Africaine de la Propriété Intellectuelle
Agreement on the Application of Sanitary and Phytosanitary
Measures
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Aspects of Intellectual Property
Rights
United Nations Conference on Trade and Development
United Nations Development Programme
World Health Organization
World Trade Organization
v
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
vi
Executive summary
Executive summary
1. The adoption of the Doha Ministerial Declaration on TRIPS and Public Health was
the outcome of carefully elaborated strategy by developing countries and a
significant achievement for those nations.
2. The Doha Declaration recognizes the “gravity” of the public health problems
afflicting many developing and LDCs, especially those resulting from HIV/AIDS,
tuberculosis, malaria and other epidemics. But the Declaration reflects the concerns
of developing countries and LDCs about the implications of the TRIPS Agreement
with regard to public health in general, without limitation to certain diseases.
3. While acknowledging the role of intellectual property protection “for the
development of new medicines”, the Declaration specifically recognizes concerns
about its effects on prices.
4. The Declaration affirms that "the TRIPS Agreement does not and should not
prevent Members from taking measures to protect public health", and that it should
be interpreted accordingly.
5. In establishing that Public Health is a clearly stated purpose of the Agreement, the
Doha Declaration establishes a specific rule of interpretation that gives content to the
general interpretive provisions of the Vienna Convention on the Law of the Treaties
on which GATT/WTO jurisprudence has been built up. Therefore, in cases of
ambiguity, panels and the Appellate Body should opt for interpretations that are
effectively “supportive of WTO Members' right to protect Public Health”.
6. The confirmation that the TRIPS Agreement has left room for flexibility at the
national level has important political and legal implications. It indicates that the
pressures to impede the use of available flexibilities run counter to the spirit and
purpose of the TRIPS Agreement. In legal terms, it means that panels and the
Appellate Body must interpret the Agreement and the laws and regulations adopted
to implement it in light of the public health needs of individual Members.
7. The Declaration clarifies that “public health crises” can represent “a national
emergency or other circumstances of extreme urgency”, and that an “emergency”
may be either a short-term problem, or a long-lasting situation. The Declaration also
places the burden on a complaining Member to prove that an emergency or urgency
does not exist.
8. The Doha Declaration clarifies Members’ right to adopt an international principle
of exhaustion of rights (determining the rules by which parallel imports may be
accepted). The Declaration states that “the effect of the provisions in the TRIPS
Agreement … is to leave each Member free to establish its own regime for such
exhaustion without challenge".
vii
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
9. The Declaration recognizes an unresolved problem relating to TRIPS and Public
Health – the use of compulsory licensing in countries with little or no manufacturing
capacity or insufficient market demand – and commits the governing body of the
TRIPS, the TRIPS Council, to reach a solution in 2002.
10. In considering various approaches to the problem of compulsory licensing in
countries with little or no manufacturing capacity or insufficient market demand,
Members must be mindful of choosing an approach that provides adequate
incentives for the production and export of the medicines in need.
11. Desirable features of any possible solution to the problem of compulsory
licensing in countries with little or no manufacturing capacity or insufficient market
demand would include: a stable international legal framework; transparency and
predictability of the applicable rules in the exporting and importing countries; simple
and speedy legal procedures in the exporting and importing countries; equality of
opportunities for countries in need of medicines, even for products not patented in
the importing country; facilitation of a multiplicity of potential suppliers of the
required medicines, both from developed and developing countries; and broad
coverage in terms of health problems and the range of medicines.
12. The Doha Declaration permits LDCs to opt for an extension of the transitional
period provided for under Article 66.1 of the TRIPS Agreement in relation to
pharmaceutical patents. However, because all but a few LDCs already grant patent
protection to pharmaceuticals, this apparent concession to LDCs may have little
practical effect.
13. It is implicit within the Doha Declaration that differentiation in patent rules may
be necessary to protect public health. The singling out of public health, and in
particular pharmaceuticals, as an issue needing special attention in TRIPS
implementation constitutes recognition that public health-related patents may be
treated differently from other patents.
14. The Doha Declaration is a strong political statement that can make it easier for
developing countries to adopt measures necessary to ensure access to health care
without the fear of being dragged into a legal battle. The Declaration is also a
Ministerial decision with legal effects on the Members and on the WTO bodies,
particularly the Dispute Settlement Body and the Council for TRIPS.
viii
Introduction
Introduction
At the Doha World Trade Organization (WTO) Ministerial Conference
(9-14 November 2001), the WTO Members took the unprecedented step of adopting a
special declaration1 on issues related to the Agreement on Trade-Related Aspects of
Intellectual Property (TRIPS) and Public Health2 . Discussion on this declaration was
one of the outstanding issues at the Conference3 , which launched a new round of
trade negotiations on a broad range of issues4 . This was the first outcome of a process
that started in early 2001 when, upon the request of the African Group, the Council
for TRIPS agreed to deal specifically with the relationship between the TRIPS
Agreement and Public Health.
The African Group’s request, supported by other developing countries, reflected
growing concerns about the implications of the TRIPS Agreement (particularly the
Agreement's provisions on patents) with regard to access to drugs. The HIV crisis in
sub-Saharan African countries, the attempts by the pharmaceutical industry, backed
by some governments5 , to block the implementation of TRIPS-compatible measures
Paragraph 17 of the general Ministerial Declaration states: “We stress the importance we
attach to implementation and interpretation of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement) in a manner supportive of public health, by
promoting both access to existing medicines and research and development into new
medicines and, in this connection, are adopting a separate Declaration”.
1
“Doha Ministerial Declaration on the TRIPS Agreement and Public Health” (hereinafter “the
Doha Declaration”), WT/MIN(01)/DEC/W/2, 14 November 2001 (see the full text in
Annex 1) .
2
The Director General of WTO emphasized the importance of this issue on the opening day
of the Conference, indicating that agreement on public health and TRIPS was the “deal
breaker” of the new round. Pascal Lamy, the EU Commissioner for Trade, stated at the
Conference that “… we must also find the right mix of trade and other policies — consider
the passion surrounding our debate of TRIPS and Access to Medicines, which has risen so
dramatically to become a clearly defining issue for us this week, and rightly so”.
3
Including implementation, agriculture, services, industrial tariffs, subsidies, anti-dumping,
regional trade agreements and environment.
4
US Public Law 105-277 (105th Congress, 1999) established that “..None of the funds
appropriated under this heading may be available for assistance for the central Government
of the Republic of South Africa, until the Secretary of State reports in writing to the
appropriate committees of the Congress on the steps being taken by the United States
Government to work with the Government of the Republic of South Africa to negotiate the
repeal, suspension, or termination of section 15 (c) of South Africa’s Medicines and Related
Substances Control Amendment Act No. 90 of 1997”. After the adoption of the TRIPS
Agreement, the US Government continued to list countries according to the Special 301
section of the US Trade Act, in many cases challenging provisions in national laws relevant to
public health.
5
1
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
by the South African Government, and the complaint brought by the USA against
Brazil in relation to compulsory licences6 , were perceived as manifestations of a
conflict between the recognition of intellectual property rights (IPRs) and essential
public health objectives. Although one of the stated goals of the TRIPS Agreement
was to reduce tensions arising from intellectual property protection7 , intellectual
property protection for pharmaceuticals and its effects on public health, and access to
drugs in particular, remained a highly controversial issue8 .
The developing countries' move to specifically address public health issues at the
Council for TRIPS was grounded on the conviction that the TRIPS Agreement should
not prevent Members from adopting measures necessary to ensure access to
medicines and to satisfy other public health needs. Several documents, particularly
by WHO9 and UNCTAD10 , as well as extensive academic work11 and NGO
statements12 , had highlighted the flexibility allowed by the TRIPS Agreement,
especially in relation to exceptions to patent rights, parallel imports and compulsory
licensing. The developing countries sought a declaration, not because of the lack of
clarity in the Agreement, but as a result of the obstacles that the authorities in those
countries had experienced when trying to make effective use of such flexibility at the
national level.
The relationship between public health and the TRIPS Agreement had been
examined in 1996 by the World Health Assembly, which addressed the subject in a
resolution on the Revised Drug Strategy13 . Subsequent resolutions adopted by the
World Health Assembly in 200114 , addressed the need to evaluate the impact of the
TRIPS Agreement on access to drugs, local manufacturing capacity and the
development of new drugs15 .
The Council for TRIPS systematically considered the relationship between public
health and TRIPS for the first time in a special session in June 2001. A number of
The declared intention of the Brazilian Government was to procure anti-retrovirals at prices
lower than those charged by patent owners, in the framework of its government-supported
program against AIDS. The USA withdrew its complaint upon an agreement with the
Brazilian government in March 2001
7 See the Preamble of the Agreement, paragraph 7: “Emphasizing the importance of reducing
tensions by reaching strengthened commitments to resolve disputes on trade-related
intellectual property issues through multilateral procedures”.
8 See e.g., Abbott, 2002a.
9 See, e.g., Velasquez and Boulet (1999).
10 UNCTAD (1996).
11 See an annotated bibliography in WHO (2001).
12 See, e.g., Oxfam (2002 ), Médecins Sans Frontières (2001); VSO (2001).
13 WHO was mandated “to report on the impact of the work of the WTO with respect to
national drug policies and essential drugs and make recommendations for collaboration
between WTO and WHO, as appropriate” (Resolution WHA49.14, 25 May 1996).
14 Resolutions WHA54.10 and WHA54.11.
15 The UN Sub-Commission for the Promotion and Protection of Human Rights also pointed
out the "apparent conflicts between the intellectual property rights regime embodied in the
TRIPS Agreement, on the one hand, and international human rights law, on the other",
including human rights to food, health and self-determination (Commission on Human
Rights, Sub-Commission on the Promotion and Protection of Human Rights, Fifty-second
session, Agenda item 4, The Realization of Economic, Social and Cultural Rights, Intellectual
Property Rights and Human Rights).
6
2
Introduction
developing countries16 and the European Commission and its Member States17 each
submitted documents to the Council. In August and September 2001, the TRIPS
Council held additional sessions for discussions on this issue. At the June meeting,
the African Group and other developing countries18 presented a draft text for a
ministerial declaration on the TRIPS Agreement and Public Health. This proposal
was a comprehensive text addressing political principles to ensure that the TRIPS
Agreement does not undermine the legitimate right of WTO Members to formulate
their own public health policies, as well as practical clarifications for provisions
related to compulsory licensing, parallel importation, production for export to a
country with insufficient production capacity, and data protection (Article 39.3 of the
TRIPS Agreement). The text also included a proposal for evaluation of the effects of
the TRIPS Agreement, with particular emphasis on access to medicines and research
and development for the prevention and treatment of diseases predominantly
affecting people in developing and least developed countries (LDCs). The USA,
Japan, Switzerland, Australia and Canada circulated a non-paper with alternative
text stressing the importance of intellectual property protection for research and
development, arguing that intellectual property contributes to public health
objectives globally. An EC non-paper was also circulated that proposed possible
solutions to the problem of production for exports to fulfil a compulsory licence in a
country with no or insufficient production capacity. Negotiations on these texts took
place at the General Council.
The eventual adoption of a declaration on Public Health and TRIPS was the outcome
of a carefully elaborated strategy by developing countries19 . Despite the initial
resistance by some developed countries20 , the Doha Declaration was adopted by
consensus, on the basis of last minute compromises and a delicate balance in
wording21 .
See the submission by the African Group, Barbados, Bolivia, Brazil, Cuba, Dominican
Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines,
Peru, Sri Lanka, Thailand and Venezuela (IP/C/W/296).
17 See IP/C/W/280, 12 June 2001.
18 Bangladesh, Barbados, Bolivia, Brazil, Cuba, Dominican Republic, Ecuador, Haiti,
Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka,
Thailand, and Venezuela.
19 “Doha is a concrete success to which developing countries and NGOs can point. Whether
Doha represents a significant shift in the power of developing countries to influence the
standard-setting process in intellectual property within WTO remains a matter of conjecture”
(Drahos, 2002, p. 26).
20 For some observers, the “anthrax crisis” shifted the balance to the public interest side in the
Doha debate on public health and TRIPS (see, e.g., South Centre, 2001, p. 11). “The US was
suddenly faced with a situation where there was a perceived need for immediate and
widespread access to a product still on-patent, where the exclusive owner of that patent,
Bayer in this case, appeared unable or unwilling to offer enough supplies to meet immediate
demand. The US Government’s first instinct was to consider the compulsory licence option
and seek out alternative manufacturers.” (Kettler, 2002, p. 9) The Canadian government also
took actions to ensure supply of the anti-anthrax drug despite the patent held by Bayer (see,
e.g., Harmon, 2001).
21 Developing countries, in particular, abandoned for study their original position asking for
the declaration to state that “Nothing in the TRIPS Agreement shall prevent Members from taking
measures to protect public health” (IP/C/W/312, WT/GC/W/450, 4 October 2001), which had
been one of the main points of contention during the preparatory work.
16
3
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
4
Scope
Scope
The Doha Declaration includes preambular provisions (paragraphs 1 to 4), a
provision aimed at confirming the interpretation of certain rules of the TRIPS
Agreement (paragraph 5), and two operative provisions requiring action by the
Council for TRIPS in relation to countries with no or insufficient manufacturing
capacity in pharmaceuticals (paragraph 6), and for the extension of the transitional
period for LDCs in relation to the protection of pharmaceutical products
(paragraph 7).
The problems addressed by the Doha Declaration are defined in paragraph 1 in
broad terms. Members recognize the “gravity” of the public health problems
afflicting many developing and LDCs, especially those resulting from HIV/AIDS,
tuberculosis, malaria and other epidemics.
Doha Declaration on TRIPS and Public Health: Paragraph 1
1. We recognize the gravity of the public health problems afflicting many developing
and least-developed countries, especially those resulting from HIV/AIDS,
tuberculosis, malaria and other epidemics.
While some developed countries attempted to limit the scope of the Declaration22 to
the HIV/AIDS crisis, the adopted text reflects the concerns of developing countries
and LDCs about the implications of the TRIPS Agreement with regard to public
health in general, without limitation to certain diseases. The reference to some
specific “epidemics”23 does not imply that the Declaration is limited to them. It
covers any “public health problem”, including those that may be derived from
diseases that affect the population in developing as well as developed countries, such
as asthma or cancer.
Further, though access to medicines was the main preoccupation that led to the Doha
Declaration, the Declaration covers not only medicines, but any product, method or
technology for health care. Thus, the Declaration applies to pharmaceutical products,
processes and uses, surgical, therapeutic and diagnostic methods24 , diagnostic kits as
well as medical equipment.
The disagreement on the scope of the declaration was reflected in the partly bracketed title
of the draft
declaration (“access to medicines”) (“public health”). Throughout the
negotiations, the USA, supported by Switzerland, proposed a text that referred to “health
crisis”, “pandemics” and “infectious disease” only. See ’t Hoen, 2001, p.13.
23 “Epidemic” is a disease prevalent among a community at a special time; one of the draft
texts of the Declaration alluded instead to “pandemics”, that is, a disease prevalent over the
whole of the country or over the whole world (The Concise Oxford Dictionary, p. 324 and 738).
24 It should be noted that WTO Members can exclude these methods from patentability (see
Article 27.3 (a) of the TRIPS Agreement).
22
5
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Finally, while patents have been the focus of the debate on this issue, the Declaration
applies to all areas of intellectual property covered by the TRIPS Agreement,
including protection of test data submitted for the marketing approval of
pharmaceuticals25 .
25
6
See para. 7 of the Declaration.
The role of TRIPS and IPRs
The role of TRIPS and IPRs
Doha Declaration on TRIPS and Public Health: Paragraphs 2 and 3
2. We stress the need for the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and
international action to address these problems.
3. We recognize that intellectual property protection is important for the
development of new medicines. We also recognize the concerns about its effects on
prices.
Paragraphs 2 and 3 of the Doha Declaration express the Members´ view with regard
to the role of TRIPS and IPRs in the context of public health.
Paragraph 2 stresses “the need for” the TRIPS Agreement “to be part of the wider
national and international action to address these problems”. This statement, read in
conjunction with paragraph 4, seems to indicate that the extent to which the
Agreement is part of the problem or of the solution to public health needs, crucially
depends on the way in which the Agreement is implemented and interpreted. This
paragraph suggests that intellectual property rights are one but not the only factor
that affects public health and, in particular, access to drugs26 .
The first sentence of paragraph 3 alludes to the “important” role of intellectual
property protection “for the development of new medicines”. Unlike other
preambular paragraphs, this one specifically refers to “medicines”27 . This statement –
welcomed by the pharmaceutical industry – is balanced by the second sentence,
which recognizes one of the troubling effects of patent protection: its impact on
prices.
The patent system is designed to enable patent holders to set prices higher than those
that would be obtained in a competitive market. The Doha Declaration recognizes
that the high prices of medicines caused by patent protection are part of the grave
problems that afflict developing countries and LDCs and is a "concern" that needs to
be addressed. The consensus achieved on patent protection's impact on drug prices
may be considered one of the major political achievements of the developing
countries in the Doha Ministerial Declaration.
Some analyses, particularly by the pharmaceutical industry, have stressed that access to
drugs is fundamentally determined by non-IPR factors, such as health infrastructure and
medical services. See, e.g., IIPI. See also the US submission to the Council of TRIPS
(IP/C/W/340, 14 March 2002).
27 The crucial role of patents in inciting research in drug development has been the subject of
extensive academic work, See, e.g. Kettler, 2002.
26
7
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
8
Public health measures
Public health measures
Doha Declaration on TRIPS and Public Health: Paragraph 4
4. We agree that the TRIPS Agreement does not and should not prevent members
from taking measures to protect public health. Accordingly, while reiterating our
commitment to the TRIPS Agreement, we affirm that the Agreement can and should
be interpreted and implemented in a manner supportive of WTO members' right to
protect public health and, in particular, to promote access to medicines for all.
In this connection, we reaffirm the right of WTO members to use, to the full, the
provisions in the TRIPS Agreement, which provide flexibility for this purpose.
Paragraph 4 of the Doha Declaration was one of the most controversial provisions of
the document and the subject of intense negotiations during the preparations for and
at the Ministerial Conference in Doha. Developing countries’ negotiating target was,
as mentioned above, to obtain recognition that nothing in the TRIPS Agreement shall
be interpreted as preventing Members from adopting measures necessary to protect
public health.
Developing countries were essentially seeking a declaration recognizing their right to
implement certain pro-competitive measures, notably compulsory licences and
parallel imports, as needed to enhance access to health care. They were frustrated by
the opposition and pressure exerted on some countries by the pharmaceutical
industry and governments28 . Moreover, some felt that the final proviso in Article 8.1
establishing that any measures adopted, inter alia, to protect public health should be
consistent with the provisions of the TRIPS Agreement,29 provided less protection for
public health than under the corresponding exceptions of Article XX (b) of GATT30
and the Sanitary and Phytosanitary Measures and Technical Barriers to Trade
agreements.
See, e.g., Drahos, 2002.
TRIPS Article 8.1: "Members may, in formulating or amending their laws and regulations,
adopt measures necessary to protect public health and nutrition, and to promote the public
interest in sectors of vital importance to their socio-economic and technological development,
provided that such measures are consistent with the provisions of this Agreement."
30 GATT Article XX: “Subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or unjustifiable discrimination between
countries where the same conditions prevail, or a disguised restriction on international trade,
nothing in this Agreement shall be construed to prevent the adoption or enforcement by any
contracting party of measures:
...
(b)necessary to protect human, animal or plant life or health;”
28
29
9
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Developed countries did not view the TRIPS Agreement as representing a barrier to
the achievement of public health objectives, and they were not prepared to
undermine any of the obligations under the Agreement31 . According to the EU, “the
TRIPS Agreement cannot be held responsible for the health crisis in developing
countries, while it must not stand in the way for action to combat the crisis”. The EU
was, consequently, “ready to contribute constructively to any debate concerning the
interpretation of its provisions”32
The text, drafted by the chair of the WTO General Council, which provided the basis
for the negotiations in Doha, offered two options for paragraph 4:
Option 1
[Nothing in the TRIPS Agreement shall prevent Members from taking measures to protect
public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we
affirm that the Agreement shall be interpreted and implemented in a manner supportive of
WTO Members' right to protect public health and, in particular, to ensure access to
medicines for all.
In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions
in the TRIPS Agreement which provide flexibility for this purpose.]
Option 2
[We affirm a Member's ability to use, to the full, the provisions in the TRIPS Agreement
which provide flexibility to address public health crises such as HIV/AIDS and other
pandemics, and to that end, that a Member is able to take measures necessary to address these
public health crises, in particular to secure affordable access to medicines. Further, we agree
that this Declaration does not add to or diminish the rights and obligations of Members
provided in the TRIPS Agreement. With a view to facilitating the use of this flexibility by
providing greater certainty, we agree on the following clarifications.]33
The wording of the first part of paragraph 4, reflects the delicate compromise
reached in Doha. It reaffirms Members’ rights to take measures “to protect public
health”, in a much less elaborated way than article XX (b) of GATT and the
respective provisions in the SPS and TBT agreements34 .
See. e.g., the statement by the US delegation at the special session of the Council for TRIPS
of 21 June 2001, IP/C/M/31.
32 IP/C/W/280.
33 During the negotiating process, the European Commission proposed the following
compromise text for paragraph 4:"Nothing in the TRIPS Agreement prevents Members from
pursuing and achieving public health objectives. Accordingly, the TRIPS Agreement shall be
interpreted and implemented in a manner supportive of WTO Members' ability to enhance access to
affordable medicines for all in the context of public health objectives".
34 The “necessity” test, central to those provisions, is not mentioned in the Doha Declaration.
On the application of such test in GATT/WTO jurisprudence, see e.g., Correa (2000b).
31
10
Public health measures
A possible interpretation for paragraph 4 is that the TRIPS Agreement does not raise
conflicts with public health. Paragraph 4 would constitute a statement of fact (“the
TRIPS Agreement does not … prevent …”) rather than a rebalancing of the
Agreement in the sense that public health overrides commercial interests. Thus, for
the European Commission, “the issue is not whether or not intellectual property
overrides public health or vice versa. Intellectual property and public health can and
should be mutually supportive because without effective medicines, public health
policies would be hampered”35 . In the view of the European Commission, the
statement contained in paragraph 4 “is important in order to give meaning to the
obvious principle that a Member’s right (or indeed duty) to pursue public health
objectives and policies is unaffected by the TRIPS Agreement”36 .
In order to give meaning to paragraph 4, however, it is possible to interpret that the
intention of the Members was to indicate that in cases where there is conflict between
IPRs and public health, the former should not be an obstacle to the realization of the
latter37 . A possible reading of this paragraph is that such a conflict may arise, and this
is precisely why “the TRIPS Agreement does not and should not prevent Members
from taking measures to protect public health”.
As mentioned, a basic issue underlying the discussions leading to the Doha
Declaration was the extent to which the final proviso of article 8.1 would mean that
intellectual property can override public health. One possible interpretation of this
proviso is that, unlike Article XX (b) of the GATT, under the TRIPS Agreement Public
Health and other reasons enumerated in Article 8.1 permit Members to adopt
measures (e.g. commercialization and price controls), but not to derogate obligations
relating to the availability or enforcement of IPRs. However, in the light of paragraph
4 of the Doha Declaration, it may be argued that Article 8.1 would not prevent
derogation from certain obligations under the TRIPS Agreement if necessary to
address public health needs.
The realization of public health becomes, with the Doha Declaration, a clearly stated
purpose of the Agreement. In affirming that the TRIPS Agreement, “can and should
be interpreted and implemented in a manner supportive of WTO Members' right to
protect public health and, in particular, to promote access to medicines for all”,
paragraph 4 gives guidance to panels and the Appellate Body for the interpretation
of the Agreement’s provisions in cases involving public health issues. In doing so,
Members have developed a specific rule of interpretation that gives content to the
European Commission, 2001, p. 2.
Ibid.
37 The Brazilian delegation pointed out at the Doha Ministerial Conference that “in the area of
intellectual property, different readings of the TRIPS Agreement have given rise to tensions.
To a certain extent, it is natural that conflicts of interests should reflect themselves in
divergent interpretations of common rules. But the commercial exploitation of knowledge
must not be valued more highly than human life. There are circumstances in which the
conflict of interests will require that the State exercise its supreme political responsibility…
Brazil promotes and upholds intellectual property rights…However, if circumstances so
require it, Brazil, like many other countries, will not hesitate to make full use of the flexibility
afforded by the TRIPS Agreement to legitimately safeguard the health of its citizens.” See
also, e.g. ‘t Hoen (2001), p. 11; Raja, p. 2002, 14, and the Joint Statement of 14 November 2001,
by MSF, Oxfam, TWN, CPT, Consumers International, HAI and The Third World Network
Third World Economics, No. 268, 1-15 November 2001.
35
36
11
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
general interpretive provisions of the Vienna Convention on the Law of the Treaties
(hereinafter “the Vienna Convention”) on which GATT/WTO jurisprudence has
been built up38 . Therefore, in cases of ambiguity, or where more than one
interpretation were possible, panels and the Appellate Body should opt for the
interpretation that is effectively “supportive of WTO Members' right to protect
public health”.
It also should be noted that paragraph 4 makes a specific reference to the issue of
“access to medicines for all”, indicating that in the interpretation of the Agreement’s
obligations, special attention should be given to the achievement of this goal.
Finally, paragraph 4 alludes to the implementation of the Agreement, and not only to
its interpretation. Implementation takes place at the national level, but is influenced
by actions taken by other governments, either in the context of bilateral dealings or in
the multilateral framework. The important message of the Declaration in this regard
is that the Agreement can be implemented39 in a manner supportive of WTO
Members' right to protect public health. As a result, other Members should restrain
from any action that hinders the exercise of such rights by Members, especially
developing countries and LDCs.
According to this paragraph, however, Members not only can implement the TRIPS
Agreement “in a manner supportive of WTO Members' right to protect public
health”, but they should also implement it in that way. This means that all Member
countries, including developed countries, are bound to contribute to the solution of
the public health problems addressed by the Doha Declaration40 . One possible way of
doing so would be, for instance, by adopting measures to allow the export of
medicines needed in a country with no or insufficient manufacturing capacity, an
issue which paragraph 6 of the Declaration requires Members to address (see below).
As stated by a panel, the TRIPS Agreement has a “relatively self-contained, sui generis status
within the WTO”, but it is “an integral part of the WTO system, which itself builds upon the
experience of over nearly half a century under the GATT 1947”. See USA- India – Patent
Protection for Agricultural and Chemical Products, WT/DS50/R, adopted on 16 January 1998,
para. 7.19.
39 Since implementation is in the last instance an obligation imposed on Member States , the
logical reading of the second sentence of paragraph 4 is that the Agreement should be
interpreted and can be implemented in a manner supportive of WTO Members' right to
protect public health.
40 See also Paragraph 17 of the general Doha Ministerial Declaration, as quoted in footnote 1
above.
38
12
Flexibility in TRIPS
Flexibility in TRIPS
The second part of paragraph 4 of the Doha Declaration reflects one of the main
concerns of developing countries in the process leading to the Doha Ministerial.
The concept of “flexibility”41 as applied to the obligations imposed by the TRIPS
Agreement, has been central to several analyses of the TRIPS Agreement42 and to the
position of developing countries at the Council for TRIPS in the special sessions on
TRIPS and health43 . Spelling out some of the available flexibility was the main
objective of the Declaration.
The Declaration stresses the flexibility “for this purpose”, that is, for the purpose of
adopting measures to protect public health. As indicated by the coverage of
paragraph 5, Members, only specified, in a non-exhaustive manner, some of the
aspects of the Agreement that provide for such a flexibility (“…we recognize that
these flexibilities include…)44 .
The confirmation that the TRIPS Agreement has left room for flexibility at the
national level has important political and legal implications. It indicates that the
pressures to impede the use of available flexibilities run counter to the spirit and
purpose of the TRIPS Agreement, especially in the light of the recognized “gravity of
the problems” faced in the area of public health by developing countries and LDCs.
In legal terms, such confirmation means that panels and the Appellate Body must
interpret the Agreement and the laws and regulations adopted to implement it in
light of the public health needs of individual Members States.
“Flexible” means “easily led, manageable, adaptable, versatile, supple, complacent”
(Concise Oxford Dictionary, p. 373).
42 See, e.g., Correa (2000a); Reichman (1997).
43 The European Commission also held, in its submission of 12 June 2001, that “In the view of
the EC and their Member States, the Agreement’s objectives, principles and purpose (set out
in Articles 7 and 8), special transitional arrangements and other provisions give these
countries a sufficiently wide margin of discretion in implementing it. This margin enables
them to set up an intellectual property regime that meets their policy needs and is capable of
responding to public health concerns” (IP/C/W/280).
44 Note that both the developing countries’ and the EC submissions to the special session of 20
June 2001, mentioned other aspects where members enjoy flexibility, such as the “Bolar
provision” and the protection of data submitted for the marketing approval of
pharmaceuticals (Article 39.3 of the Agreement). See IP/C/W/296 and IP/C/W/280.
41
13
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Interpretation
Doha Declaration on TRIPS and Public Health: Sub-paragraph 5 (a)
5. Accordingly and in the light of paragraph 4 above, while maintaining our
commitments in the TRIPS Agreement, we recognize that these flexibilities include:
a. In applying the customary rules of interpretation of public international law, each
provision of the TRIPS Agreement shall be read in the light of the object and purpose
of the Agreement as expressed, in particular, in its objectives and principles.
The objective of developing countries in proposing sub-paragraph 5(a) of the Doha
Declaration was to stress the importance of TRIPS Articles 7 and 8 in the
interpretation of the Agreement, particularly in the light of Article 31 of the Vienna
Convention45 . They attained their objective without ignoring, however, that other
provisions of the Agreement also contribute to the determination of its object and
purpose.
That TRIPS purposes are elaborated in its Articles 7 and 8, but also in other
provisions of the Agreement has, in fact, already been recognized in TRIPS/WTO
jurisprudence. In the Canada-Patent protection of pharmaceutical products case46 , the
WTO dispute settlement panel argued, in connection with Article 30 of the TRIPS
Agreement, that “the goals and the limitations stated in Articles 7 and 8 ” as well as
those of “other provisions of the TRIPS Agreement which indicate its object and
purposes …must obviously be borne in mind” when examining the conditions set
forth by said Article. The panel thus determined that Articles 7 and 8 express the
“object and purpose” of the TRIPS Agreement, but that these are not the only
provisions establishing the Agreement's objectives.
It is also relevant to note that the EC and their Member States emphasized the key
role of Articles 7 and 8 in the interpretation of the TRIPS Agreement, in its
submission to the Council for TRIPS of 12 June 200147 . It stated that
“Although Articles 7 and 8 were not drafted as general exception clauses,
they are important for interpreting other provisions of the Agreement,
including where measures are taken by Members to meet health objectives”.
In fact, the Doha Declaration goes beyond merely confirming the relevance of
Articles 7 and 8 for the interpretation of the TRIPS Agreement. It provides an
understanding about the purpose of the TRIPS Agreement in relation to public health
It is unclear why this interpretive rule has been considered as one of the “flexibilities” in
paragraph 5. In fact, such rule, properly applied, should ensure that due deference to national
law is given in appropriate cases; that is, that the flexibility left to Member States is respected
by the DSB.
46 WT/DS114/R, 17 March 2000 (hereinafter the “EC-Canada case”).
47 See IP/C/W/280.
45
14
Flexibility in TRIPS
issues, which should guide any future rulings by panels and the Appellate Body
dealing with such issues.
Compulsory licences
Doha Declaration on TRIPS and Public Health: Sub-paragraph 5 (b)
5. Accordingly and in the light of paragraph 4 above, while maintaining our
commitments in the TRIPS Agreement, we recognize that these flexibilities include:
…
b. Each Member has the right to grant compulsory licences and the freedom to
determine the grounds upon which such licences are granted.
Developing countries have identified compulsory licensing as one of the key
instruments that may limit the exclusive rights of the patent owner when needed to
fulfill certain objectives of public policy, particularly in order to ensure the
availability of alternative sources for the supply of medicines at lower prices48 .
Sub-paragraph 5 (b) of the Doha Declaration deals with an issue central to the
interests of developing countries. It simply states what is apparent: Article 31 sets
forth a number of conditions for the granting of compulsory licences (case-by-case
determination; prior negotiation, in certain cases, with the patent owner;
remuneration, etc.), but it does not limit the grounds on which such licences can be
granted. Though Article 31 refers to some of the possible grounds (such as
emergency and anti-competitive practices) for issuing compulsory licences, it leaves
Members full freedom to stipulate other grounds, such as non-working, public health
or public interest.
Though sub-paragraph 5 (b) does not add anything substantively to the
understanding of TRIPS, the Doha Declaration specifically employs the expression
“compulsory licence”, which is not found in the TRIPS Agreement itself49 . The use of
this terminology may help to create awareness, particularly among health ministries
in developing countries and LDCs, about the possible utilization of compulsory
licences to meet public health and other objectives50 .
See, e.g., Velasquez and Boulet, 1999; Correa (2000a).
TRIPS Article 31 is entitled “[O]ther use without authorization of the right holder”.
50 Despite the fact that the governmental use for a non-commercial purpose of a patent is not
mentioned in the commented paragraph, such mechanism can also be important to attain
public health objectives.
48
49
15
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Emergency
Doha Declaration on TRIPS and Public Health: Sub-paragraph 5 (c)
5. Accordingly and in the light of paragraph 4 above, while maintaining our
commitments in the TRIPS Agreement, we recognize that these flexibilities include:
…
c. Each member has the right to determine what constitutes a national emergency or
other circumstances of extreme urgency, it being understood that public health
crises, including those relating to HIV/AIDS, tuberculosis, malaria and other
epidemics, can represent a national emergency or other circumstances of extreme
urgency.
Paragraph 5 (c) of the Doha Declaration states what is an unquestionable right of
Members States: the right to determine “what constitutes a national emergency or
other circumstances of extreme urgency”. Such determination may be relevant for
the granting of compulsory licences, the establishment of exceptions under Article
30, or the adoption of other measures permitted under Article 8.1 of the Agreement51 .
Paragraph 5 (c) also includes a presumption:
“it being understood that public health crises, including those relating to
HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a
national emergency or other circumstances of extreme urgency”.
This provision is important for three reasons. First, it clarifies that “public health
crises” can represent “a national emergency or other circumstances of extreme
urgency”, thereby allowing for the granting of compulsory licences when provided
for under national law52 and, pursuant to TRIPS Article 31 (b), without the obligation
for prior negotiation with the patent owner.
In May 2002, the Minister of Justice, Legal and Parliamentary Affairs of Zimbabwe issued a
Declaration of Period of Emergency (HIV/AIDS) (Notice, 2002). In view of the rapid spread
of HIV/AIDS among the population of Zimbabwe, the Minister declared “an emergency for
a period of six months, with effect from the date of promulgation of this notice, for the
purpose of enabling the State or a person authorised by the Minister under section 34 of the
Act (a) to make or use any patented drug, including any anti-retroviral drug, used in the
treatment of persons suffering from HIV/AIDS or HIV/AIDS related conditions; (b) to
import any generic drug used in the treatment of persons suffering from HIV/AIDS or
HIV/AIDS-related conditions”. A Declaration of Sanitary Emergency until 31 December 2002
was also issued by the Executive Power of Argentina (Decree 486, 12 March, 2002), but it does
not make explicit reference to patent law provisions.
52 A survey covering the patent laws of 70 developing countries indicates that only 13 have
provided for national emergency or health emergency as specific grounds for the granting of
compulsory licences. See Thorpe (forthcoming 2002).
51
16
Flexibility in TRIPS
Second, the reference to “HIV/AIDS, tuberculosis, malaria and other epidemics”
indicates that an “emergency” may be not only a short-term problem, but a longlasting situation, as is the case with the epidemics specifically mentioned for
illustrative purposes. This recognition may be deemed an important achievement for
developing countries in the Doha Declaration, since it implies that specific measures
to deal with an emergency may be adopted and maintained as long as the underlying
situation persists, without temporal constraints.
Third, if a Member complains about the qualification of a specific situation by
another Member as a “national emergency or other circumstances of extreme
urgency”, the language of paragraph 5 (c) places the burden on the complaining
Member to prove that such emergency or urgency does not exist. This represents an
important difference with respect to earlier GATT/WTO jurisprudence outside of the
TRIPS context that, under the “necessity test”, put the burden of proof on the
Member invoking an exception to its obligations53 .
Exhaustion
Doha Declaration on TRIPS and Public Health: Sub-paragraph 5 (d)
5. Accordingly and in the light of paragraph 4 above, while maintaining our
commitments in the TRIPS Agreement, we recognize that these flexibilities include:
…
d. The effect of the provisions in the TRIPS Agreement that are relevant to the
exhaustion of intellectual property rights is to leave each member free to establish its
own regime for such exhaustion without challenge, subject to the MFN and national
treatment provisions of Articles 3 and 4.
The authorization of parallel imports under an international principle of exhaustion
has also been regarded by developing countries as a key component of a patent
system sensitive to public health needs. This was one of the key issues raised by
pharmaceutical companies against South Africa in the already mentioned case54 .
Developing countries were keen to clarify in the Doha Declaration the Members’
right to adopt an international principle of exhaustion of rights55 , in accordance with
article 6 of the Agreement. Paragraph 5 (d) provides the sought-after clarification. It
specifically states that “the effect of the provisions in the TRIPS Agreement… is to
leave each Member free to establish its own regime for such exhaustion without
challenge” (emphasis added).
See, Correa, 2000b.
See, e.g. Bond, 1999.
55 This principle permits the import of a patented product into a country without the
authorization of the title holder or his licencees, to the extent that the product has been put on
the market elsewhere in a legitimate manner. See, e.g., Velásquez and Boulet, 1999.
53
54
17
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Though this paragraph does not add substantively to the TRIPS Agreement, it
certainly reassures Members wishing to apply an international exhaustion principle
that it would be legitimate and fully consistent with the Agreement to do so.
It is necessary to stress that in order to take advantage of this and other flexibilities
allowed by the TRIPS Agreement – and confirmed by the Doha Declaration –
national laws must incorporate the appropriate rules in the form of compulsory
licences, exceptions and other relevant provisions. Such flexibilities do not
automatically translate themselves into national regimes, and do not protect
governments (or private parties) from legal actions based on national laws and
regulations that fail to make use of the TRIPS Agreement's flexibilities. For example,
specific legal provisions allowing for parallel imports would be normally necessary
in order to benefit from the principle of international exhaustion of rights56 .
A survey of patent laws in developing countries shows that many of such countries
have not or only partially used the flexibilities allowed by the TRIPS Agreement57 .
The effective implementation of the Doha Declaration in those countries, therefore,
would call for an amendment to national laws so as to incorporate the exceptions and
safeguards necessary to protect public health58 .
Though in some countries this principle may result from jurisprudential elaboration, it may
take a long time to test what the legal solution is. The ensuing uncertainty is likely to
discourage or effectively prevent the use of such a mechanism as a means to obtain medicines
at lower prices than those domestically available.
57 See Thorpe, 2002.
58 For possible options for such a reform, see, e.g. Correa, 2000c.
56
18
Transfer of technology to LDCs
Members with insufficient or no
manufacturing capacities
Doha Declaration on TRIPS and Public Health: Paragraph 6
6. We recognize that WTO members with insufficient or no manufacturing capacities
in the pharmaceutical sector could face difficulties in making effective use of
compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS
to find an expeditious solution to this problem and to report to the General Council
before the end of 2002.
In paragraph 6 the Doha Declaration instructs the Council for TRIPS to address a
delicate issue: how can Members lacking or with insufficient manufacturing
capacities make effective use of compulsory licensing. The Declaration requests the
Council for TRIPS “to find an expeditious solution to this problem and to report to
the General Council before the end of 2002”. As discussed below, in order to be
effective such a solution should be economically viable, and not only legally
acceptable.
A major limitation in compulsory licensing rules under Article 31 (f) of the TRIPS
Agreement is the requirement that a product made under a compulsory licence be
supplied predominantly to the licensee's domestic market59 , unless the licence were
issued to remedy anti-competitive practices (Article 31 (k) of the Agreement). This
means, in practical terms, that Members with large markets, like India, the UK or the
USA, typically could easily grant compulsory licences for the supply of patented
medicines to meet public health needs (for instance, those arising from the threat of
bioterrorism). However, for Member countries with small markets, like the African
countries where the AIDS crisis is most severe, it might be extremely difficult to
establish economically viable production if the manufactured product has to be
“predominantly” sold in the local market.
The basic problem underlying paragraph 6 is that many developing countries lack or
have an insufficient capacity to manufacture medicines on their own. As indicated in
Annex 260 , manufacturing capacities in pharmaceuticals are distributed very
unevenly in the world. Not many countries have the capacity to produce both active
TRIPS Article 31: “Where the law of a Member allows for other use of the subject matter of
a patent without the authorization of the right holder, including use by the government or
third parties authorized by the government, the following provisions shall be respected:
…
(f) any such use shall be authorized predominantly for the supply of the domestic market of
the Member authorizing such use”.
60 See also WHO, 2000, p. 32.
59
19
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
ingredients and formulations, and very few countries maintain significant research
and development capabilities.
Given that only a few developing countries have substantial manufacturing capacity
in pharmaceuticals, once the TRIPS Agreement becomes fully operative (after 2005),
many countries may face difficulties in acquiring medicines at affordable prices.
Today, for example, some countries, such as India, do not provide patent protections
for pharmaceutical products, and produce generic versions at a fraction of the price
of the patented product. A Member country where the price of patented products is
high has the option of issuing a compulsory licence to permit import from such
countries. The problem is that, as countries fully comply with the TRIPS Agreement
by 2005 at the latest, they will no longer be able to produce and export cheap generic
copies of patented medicines. Consequently, the sources of affordable new medicines
will dry up and countries without sufficient manufacturing capacity and market
demand will not be able to grant a compulsory licence either for the local production
or for the importation of such medicines: they will become entirely dependent on the
expensive patented versions61 .
This problem had been raised by developing countries during the special sessions on
TRIPS and health at the Council for TRIPS, and by the EC and their Member States in
its submission of 12 June 2001. Developing countries argued that “nothing in the
TRIPS Agreement prevents Members from granting compulsory licences for foreign
suppliers to provide medicines in the domestic market… In this respect, the reading
of Article 31 (f) should confirm that nothing in the TRIPS Agreement will prevent
Members from granting compulsory licences to supply foreign markets”62 .
The EC and their Member States noted the problems posed by the limitation imposed
by Article 31 (f). A Member is free to grant a compulsory licence for the importation
of goods which are under patent in its own territory, as long as the imported goods
have been produced in a country where they are not patented, or where the term of
protection has expired. However, when a patent exists in the potential supplier
country, the patent owner may block exports to the country in need of the
medicines63 . Moreover, since Article 31 (f) requires that a compulsory licencee
predominantly supply the domestic market, that provision would prevent the
granting of a compulsory licence exclusively or mainly to export to a country in need
of certain medicines.
Addressed problem
To determine the problem addressed under paragraph 6, it must be read in the
context of paragraphs 1 to 4 of the Doha Declaration. As mentioned above, though
the Declaration specially refers to the problems resulting “from HIV/AIDS,
tuberculosis, malaria and other epidemics”, it is intended to provide solutions to
“health problems” in general. There is nothing in paragraph 6 limiting its application
to cases of crises or public emergency.
See, e.g., Oxfam, 2002.
See IP/C/W/296.
63 See IP/C/W/280.
61
62
20
Transfer of technology to LDCs
Paragraph 6 refers to “manufacturing” capacities in the pharmaceutical sector.
“Manufacturing” is the “making of articles by physical labor or machinery, especially
on large scale”64 . This suggests — based on the ordinary meaning of the words used,
as mandated by the Vienna Convention — that the Declaration is intended to address
the problems that arise when production on a large scale, that is, in an economically
viable manner, cannot be conducted.
The pharmaceutical sector includes — as indicated in Annex 2 — both the
manufacturing of active ingredients (that is, the compounds that possess therapeutic
activity) as well as of finished products or pharmaceutical formulations (active
ingredients and the excipients added, as necessary, for the administration of a
medicine to a patient). Paragraph 6 does not distinguish between these two
categories of activities. It should be interpreted, therefore, that paragraph 6 addresses
the lack of or insufficient capacity either to produce active ingredients or
pharmaceutical formulations or both.
A country may have the technical capacity to produce active ingredients or
formulations, but such production may not be economically viable. One of the main
objectives of the Doha Declaration is to “promote access to medicines for all”
(paragraph 4). This objective would not be achieved if low-priced medicines (and
other health-care products) could not be produced because meaningful economies of
scale were out of reach. A “solution” under paragraph 6 may be illusory if it does not
benefit countries where manufacturing may be technically feasible but not
economically viable.
The determination of the coverage of paragraph 6 raises other interpretive issues,
namely:
(a) Does paragraph 6 refer to medicines only, or does it encompass any health care
product? To the extent that a product is expended through pharmacies (such as
diagnostic kits), it will fall under the ordinary meaning of a “pharmaceutical”
product65 .
(b) Does the notion of “capacity”66 refers to the general capacity to manufacture or to
the capacity to manufacture a particular product?
A country may have
manufacturing capacity in general to produce active ingredients or formulations, but
lack the equipment, technology or access to the intermediate chemicals necessary to
produce a particular product. For instance, some countries may be able to
manufacture relatively simple drugs, but not anti-retrovirals, where production and
quality control standards are extraordinarily important because of the risk of drug
resistance and/or toxicity. A reasonable reading of paragraph 6 suggests that it is
intended to address both the cases of general and particular lack or insufficient
The Concise Oxford Dictionary, p. 617 (emphasis added).
“Pharmaceutical” is “of or engaged in pharmacy; of the use or sale of medicinal drugs”
(The Concise Oxford Dictionary, p. 768). It is also opens the possibility, given the broad scope
of the Doha Declaration, as mentioned above, for Members to discuss the inclusion of other
products, such as testing equipment.
66 “Capacity” is the “power of containing, receiving, experiencing or producing” (The Concise
Oxford Dictionary, p. 136).
64
65
21
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
capacity, since otherwise it would not be possible for the concerned country to
address its “health problems” (paragraph 1) and to “protect public health”
(paragraph 4).
Under this interpretation, the solution to be worked out in line with paragraph 6
should not be based on the determination of categories of Member countries with or
without manufacturing capacity, or with or without a sufficient manufacturing
capacity. Rather a solution should apply to any Member, or at least to any developing
country or LDC where the effective use of compulsory licensing is not possible
because of capacity limitations and insufficient market demand.
(c) Who can receive compulsory licences in the exporting or the importing country?
Pursuant to paragraph 6, recipients clearly may include State as well as commercial
entities. There is no limitation under Article 31 in this respect, and it would be
contrary to the objective of the Doha Declaration to exclude the possibility of
granting the required compulsory licence to a for-profit entity.
(d) Where should potential suppliers of medicines be located? Potential suppliers of
the required medicines may be located in developed and developing countries
alike67 . The purpose of the Doha Declaration is to alleviate grave public health
problems, independent of the location of the source of supply. Hence, in order to
effectively implement the Declaration, both developed and developing countries
should introduce legislative changes, as necessary, to allow exports to countries in
need.
(e) Can countries where no patent protection exists benefit from a solution under
paragraph 6? Since a compulsory licence can only be granted when a patent exists,
paragraph 6 seems to relate only to cases where a pharmaceutical patent is in force in
the importing country. This would include cases where product or process patents
have been granted68 , but would exclude and seriously disadvantage69 countries
where no patent protection for pharmaceuticals is granted70 , or even countries where
such protection exists but where the needed product or process is, for any reason71 ,
off-patent. Finding a solution to the problems of these latter countries will be an
essential component in the implementation of the Doha Declaration, if not
specifically under paragraph 6, as a part of the “action” necessary to address the
public health problems that afflict developing countries and LDCs (see paragraphs 1
and 2 of the Declaration)72 .
Thus, in July 2000, a Canadian generic pharmaceutical manufacturer announced that it
could supply, at cost, alternatives to the major AIDS treatments for developing countries
within months, if the Canadian Federal Government granted the needed compulsory licences
under the Patent Act.
68 It would also cover cases where patents on new uses have been conferred, if admissible
under the relevant national law.
69 See the joint letter sent on January 28, 2002 to the TRIPS Council members by Consumer
Project on Technology, Médecins Sans Frontières, Third World Network, Oxfam, Health Gap
Coalition and Essential Action.
70 As discussed below, LDCs have been authorized by the Doha Declaration to delay such
protection until 2016.
71 Because a patent has not been applied for, has been rejected or cancelled.
72 It should be noted that nothing would prevent the Council for TRIPS from considering a
situation not expressly mentioned in paragraph 6 of the Declaration.
67
22
Transfer of technology to LDCs
23
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
(f) Does paragraph 6 cover cases where an authorization for governmental use has
been accorded? Though it is possible to distinguish between “compulsory licences”
and authorizations for governmental use73 , their effect is similar and they are jointly
treated in Article 31 of the TRIPS Agreement. There is no reason to exclude
government use authorizations from the coverage of paragraph 6.
Box 1
Designing a Solution to the Paragraph 6 Problem
In considering approaches to implement paragraph 6, it is vital to consider the
efficiency and workability of alternative approaches. This will not only depend on
the decisions adopted in the framework of WTO but, crucially, on the steps taken at
the national level to introduce legislative changes necessary to implement the
adopted solution.
Some of the desired features of any possible solution would include:
• stability of the international legal framework, in order to ensure a long-term
solution;
• transparency and predictability of the applicable rules in the exporting and
importing countries, so as to provide the required incentives to the private
sector to act within the established framework;
• simple and speedy legal procedures in the exporting and importing countries,
to allow for the fast supply of needed medicines, with the required quantity
and quality;
• equality of opportunities for countries in need of medicines, even for
products not patented in the importing country and for countries which are
not WTO Members74 ;
• facilitation of a multiplicity of potential suppliers of the required medicines,
both from developed and developing countries;
• broad coverage in terms of health problems and the range of medicines (not
limited to certain diseases or products).
In addition, the legal solution should not be encumbered with limitative conditions
that could deprive it of practical value, nor should it limit the grounds for granting
compulsory licences.
While in the case of compulsory licence a private party may be authorized to use and
commercialize the invention for a profit, under governmental use the exploitation of the
invention should be made to satisfy a governmental need, for non-profit purposes. This
includes the case — for example — in which a private company produces a patented drug, as
a subcontractor, to supply the government, who distributes the drug through public
hospitals.
74 There are a significant number of countries which are not members of the WTO (while
many are negotiating accession) that may face the problems addressed in paragraph 6.
73
24
Transfer of technology to LDCs
Possible approaches
Different approaches may be followed in order to address the problem posed by lack
of or insufficient manufacturing capacity in pharmaceuticals. The main options
include:
(a)
To amend75 Article 31 (f), in order to allow for the granting of a compulsory
licence which is not “predominantly” for the domestic market.
(b)
To provide for a specific exception for exports under Article 30 of the TRIPS
Agreement76 , possibly by means of an authoritative interpretation77 ;
(c)
To agree on a moratorium with regard to complaints against countries that
export some medicines to countries in need, under certain conditions78 .
(d)
To declare exports to a country eligible under paragraph 6 as non-judicable
under the WTO rules79 ;
(e)
To allow a Member to issue a compulsory licence to a manufacturer in
another country, provided the government of that other country recognized the
licence (which it would not be obliged to do under the Agreement)80 , and provided
that all the goods manufactured under the licence were exported to the country
granting the licence81 .
Other options include the transfer of technology in order to create manufacturing
capacity in the country in need82 , the creation of a “regional pharmaceutical supply
center”83 , and the establishment of “pharmaceutical production export zones”84 .
In the absence of consensus, an amendment to a WTO Multilateral Trade Agreement must
be approved by a two-thirds majority, but it only becomes binding on Members that accepted
it. An amendment may also be adopted by a three-fourths majority as binding on all
Members, but any Member which has not accepted it shall be free to withdraw from the WTO
or to remain as a Member with the consent of the Ministerial Conference (Article X.1 and 2 of
the Agreement Establishing the WTO).
76 See the letter of 28 January 2002 sent to the Members of the Council for TRIPS by Consumer
Project on Technology, Médecins Sans Frontières, Third World Network, Oxfam, Health Gap
Coalition and Essential Action.
77 An authoritative interpretation needs to be adopted by a three-fourths majority of
Members, and should not be used “in a manner that would undermine the amendments
provision of article X” (article IX.2 of the WTO Agreement).
78 Proposed by the USA delegation at the March 2002 session of the Council for TRIPS.
79 Unlike the moratorium, this solution would be permanent. See, e.g. Attaran, 2002.
80 The effective application of this option faces jurisdictional barriers. An authority in a given
country can only grant a compulsory licence valid in that country. There is no obligation on
other countries to admit extraterritorial effects of such a grant. This could be done, however,
under the concept of “Comity See”, e.g., Abbott, 2002b, p. 29.
81 See IP/C/W/280.
82 According to the statement by Kenya on behalf of developing countries at the March 2002
session of the Council for TRIPS, “any expeditious solution to address the problem
acknowledged in Paragraph 6 should not detract the TRIPS Council from the need to consider
measures that support the acquisition of all necessary technology and the building of a sound
technological base including in respect of medical technology; this is the proven sustainable
way to address the public health and public policy concerns of developing countries and least
developed countries”. This would be, however, a long-term solution and not an
“expeditious” solution as envisaged under paragraph 6.
83 See Reichman, 2002.
75
25
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Some of the options mentioned above have been examined at the session of the
Council for TRIPS held in March 2002 (see Box 2).
Box 2
Proposals relating to implementation of Paragraph 6
discussed at the Council for TRIPS (March 2002)
The EC and their Member States submitted two possible options to address the
paragraph 6 problem85 :
1) an amendment to Article 31 of the TRIPS Agreement in order to carve out an
exception to Article 31 (f) for exports under compulsory licences, under certain
conditions, of products needed to combat serious public health problems; or
2) an interpretation of the limited exceptions clause of Article 30 of the TRIPS
Agreement in a way to allow production for export, to certain countries and under
certain conditions, of products needed to combat serious public health problems;
Option (1) would be subject to three conditions: criteria ensuring that importing
countries actually face serious public health problems, safeguards against reexportation of the cut-price generics, particularly to rich countries, and reporting
requirements that would inform trading partners of such action.
Option (2) would be subject to two minimum conditions: the entirety of the product
must be exported to the country with the public health problem, and re-export from
the importing country would be prohibited86 .
3) The USA proposed a moratorium whereby WTO Members would agree not to
bring a WTO complaint against countries that export some medicines to countries in
need, so long as certain other conditions are met87 .
On behalf of the African Group, Brazil, Cuba, Dominican Republic, Ecuador,
Honduras, India, Indonesia, Jamaica, Malaysia, Sri Lanka and Thailand, Kenya made
a statement suggesting, as possible options, an amendment to Article 31 in order to
eliminate paragraph "f", or to develop an authoritative interpretation that would
recognize the right of Members to allow the production without the consent of the
patent holder to address public health needs in another country, under Article 30 of
the TRIPS Agreement.
See, e.g., Abbott, 2002b.
See IP/C/W/339, 4 March 2002.
86 In addition, the EC and their Member States indicated that the Article 30 exception should
conform with other TRIPS provisions, in particular Article 27.1.
87 According to the USA submission, any solution should only apply to epidemics referred to
in the Doha Declaration – HIV/AIDS, tuberculosis and malaria -- and only to countries with
insufficient or no pharmaceutical manufacturing capability. The USA also questioned
whether commercial entities should be allowed to produce under such licences. See
IP/C/W/340, 14 March 2002.
84
85
26
Transfer of technology to LDCs
It is beyond the remit of this study to examine thoroughly the merits of the different
options mentioned above. In the light of the previous analysis, however, some of the
advantages and disadvantages of the proposals described in Box 1 are considered in
more detail.
(a) Article 31 (f)
Article 31 (f) prevents the granting of a compulsory licence exclusively or mainly to
export to a country in need of certain medicines88 .
The option based on the amendment of Article 31 (f) of the TRIPS Agreement would
require three steps: (a) a political decision to open the Agreement to renegotiation
and an approval of the agreed modification; (b) a change in the national law of the
potential exporting country in order to delete the “predominantly” requirement
already incorporated in many laws, and to specify as a ground for a compulsory
licence the need to address a paragraph 6 situation, and (c) the granting in the
exporting country of a compulsory licence upon request of an interested party.
The first step may encounter political resistance by those countries that are reluctant
to amend any part of the Agreement, because of the risk of stimulating the
renegotiation of other provisions. The second step is likely to require action by
national parliaments. Legislative processes are generally complex and lengthy. In
addition, though domestic producers may benefit from new export opportunities, an
amendment to the national compulsory licence system may be perceived as
benefiting mainly the population in a foreign country, and may fail to gain sufficient
political support. Finally, if the law were amended, the government would still need
to exercise its power to grant a particular compulsory licence, provided that requests
were made for that purpose.
Where there was a request for a compulsory licence, it would be necessary to
undertake a prior negotiation on commercially reasonable terms with the patent
holder, and to determine the level of royalty compensation to be paid upon issuance
of a compulsory licence. Moreover, the granting authority may have to make a
determination of the level of “capacity” of the importing country and of the public
health need, if these conditions were required under the Article 31 (f) amendment
and/or under the national law. Compulsory licence procedures, in addition, may be
costly and burdensome, and may be subject to industry’s opposition and give rise to
political pressures at the bilateral level.
It is interesting to note, however, that some developed countries provide for compulsory
licences or governmental use for export without the limitation imposed by Article 31 (f). Such
is the case of Article 168 of the Australian Patent Act and Article 55 (2) of the Patent Act of
New Zealand, which permit exports under an agreement with a foreign country to supply
products required for the defence of that country. Article 48B(d)(i) of the UK Patent Act
provides for a compulsory licence in respect of a patent whose proprietor is not a WTO
proprietor when the owner’s failure to licence the patent on reasonable grounds means that a
market for the export a patented product made in the UK is not being supplied.
88
27
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
A possible solution based on an amendment to Article 31 (f) may also provide for
double compensation to be paid to the patent holder (in both the importing and
exporting countries), thus increasing the cost and possibly reducing access to the
products in need.
The three-step process required for the compulsory licence option may mean that a
practical solution may be years away, and does not constitute an “expeditious”
solution.
(b) Article 30
Article 30 allows Members to provide for limited exceptions to the exclusive rights
conferred by a patent, that is, to define acts that would not be deemed as infringing
when made without the authorization of the patent owner. Such exceptions may
include, for instance, acts of experimentation and the request for marketing approval
of a pharmaceutical product before the expiration of the patent (known as the “Bolar
exception”)89 .
An Article 30 solution may be more streamlined and easier to implement than an
Article 31 (f) solution, since no amendment and parliamentary approval is involved,
and the exporting country would not be bound to grant case-by-case compulsory
licences.
The solution based on an interpretation of Article 30 avoids two of the three steps
mentioned above and the double compensation issue. There is no need to amend the
Agreement; the TRIPS Council could simply provide an authoritative interpretation.
An amendment to national law in exporting countries would be required (a step that
may encounter the same type of difficulties as mentioned above), but once provided,
the exception could be invoked without the need to obtain, case-by-case, a
compulsory licence from the government of the exporting country. The exception
could be invoked at any time, and without time limit, by any third party. Finally,
compensation would only be payable under the compulsory licence in the importing
country.
89
28
See, e.g., Velasquez and Boulet, 1999.
Transfer of technology to LDCs
An Article 30 solution must overcome possible objections about the consistency of an
exports exception with the conditions of Article 3090 , which have been narrowly
interpreted by a panel in the EC-Canada case91 .
It must be noted, however, that the interpretation given by a panel (or the Appellate
Body) to a particular provision does not bind Members, who may depart from such
interpretation in exercising their “exclusive authority to adopt interpretations”
(Article IX.2 of the WTO Agreement). In fact, in adopting the Doha Declaration,
Members have established a precedent for reading the exception in Article 30 in a
broader way than the panel in the EC-Canada case, whenever public health issues
are at stake. In effect, since the TRIPS Agreement is “a part of the wider national and
international action” to address public health problems (paragraph 2 of the Doha
Declaration), the panels and the Appellate Body should consider the public-health
implications of exceptions to the patent owner’s exclusive rights.
A possible difficulty is that any interpretation may be read across to other Articles of TRIPS.
See IP/C/W/340.
91 WT/DS114/R, 17 March 2000.
The panel provided an interpretation of what “limited” means in Article 30:
“The word "exception" by itself connotes a limited derogation, one that does not undercut the
body of rules from which it is made. When a treaty uses the term "limited exception", the
word "limited" must be given a meaning separate from the limitation implicit in the word
"exception" itself. The term "limited exception" must therefore be read to connote a narrow
exception - one which makes only a small diminution of the rights in question (para. 7.30)
90
In the absence of other indications, the Panel concluded that it would be justified in reading
the text literally, focusing on the extent to which legal rights have been curtailed, rather than
the size or extent of the economic impact. In support of this conclusion, the Panel noted that
the following two conditions of Article 30 ask more particularly about the economic impact of
the exception, and provide two sets of standards by which such impact may be judged The
term "limited exceptions" is the only one of the three conditions in Article 30 under which the
extent of the curtailment of rights as such is dealt with” (para. 7.31).
The panel also considered what “normal exploitation” means. It argued that:
“The normal practice of exploitation by patent owners, as with owners of any other
intellectual property right, is to exclude all forms of competition that could detract
significantly from the economic returns anticipated from a patent's grant of market
exclusivity. The specific forms of patent exploitation are not static, of course, for to be effective
exploitation must adapt to changing forms of competition due to technological development
and the evolution of marketing practices. Protection of all normal exploitation practices is a
key element of the policy reflected in all patent laws” (para. 7.55).
Finally, the panel indicated that "legitimate interests" must be “construed as a concept broader
than legal interests” (para 7.71), but did not address what “unreasonably” means, since the
panel’s analysis led to the conclusion that there was not in the case “conflict” with the normal
exploitation of a patent, and therefore it was not necessary to elucidate whether the Canadian
exception was reasonable or not. If a conflict of such kind were found, however, the way in
which “unreasonably” were to be interpreted would acquire crucial importance and become a
delicate issue.
For an interpretation of Article 30 in the context of paragraph 6, see Abbott, 2002b.
29
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
An export exception, if circumscribed to situations defined in accordance with
paragraph 6, may be reasonably deemed to fall under the three conditions stipulated
by Article 30. The exception
•
•
•
•
would be “limited” to specified circumstances;
would “not unreasonably conflict with a normal exploitation of the
invention” since, though exportation is a normal mode of exploiting an
invention, supplying of a market at low prices by a third party may not
conflict with such exploitation (which is normally made in order to obtain the
monopolistic rent generated by patent protection);
would not “unreasonably prejudice the legitimate interests of the patent
owner”, to the extent that safeguards are adopted in order to avoid diversion
to other markets;
would positively “take account of the legitimate interests of third parties”
(consumers in the importing country)92 .
(c) Moratorium
A moratorium93 does not imply any change of the substantive treaty obligations; it
only temporarily suspends their operation94 . The moratorium approach offers an
“expeditious” response to the problem posed by paragraph 6, but not a “solution”,
since it would not be straightforward enough either to induce potential exporting
countries to change their legislation to permit production for export, or to induce
generic manufacturers to invest in creating or increasing export capacity. In addition,
it is unclear what procedures would be applied in order to adopt a moratorium, and
whether formal changes to the TRIPS Agreement would be necessary95 .
Though most waivers apply to just one named contracting party, in GATT history at
least two waivers were framed in general terms to apply to any contracting party
who fulfilled the criteria. At their eleventh session, the Contracting Parties
formulated a series of guidelines for the issuance of waivers, partly as a response to
the perception that a waiver could produce an effect substantially the same as an
amendment (Jackson, 2000, p. 29).96 In exceptional circumstances, the Ministerial
Conference can, by a three-fourth majority, waive an obligation imposed on a
Member, for a determined period. A waiver is bureaucratic to administer, since it
Questions may also arise as to whether – given the territoriality of patent grants – the
interests of the consumers in a foreign country may be deemed a “legitimate interest” for the
purposes of Article 30. Canada held, in this regard, in the EC-Canada case that “[a]s the
TRIPS system was designed to be international and so to extend across borders there was no
reason why the legitimate interests of the third parties in other countries could not be taken
into account when applying a limited exception under Article 30” (para.4.38(d)).
93 A “moratorium” is “a period during which an obligor has a legal right to delay meeting an
obligation” (Blacks’ Law Dictionary, Abridged Sixth Edition, St. Paul, Minnesota, West
Publishing, 1991, p. 698).
94 See Article 57 of the Vienna Convention of the Law of Treaties.
95 See, e.g. Article 64.2 of the TRIPS Agreement, which established a five years moratorium for
“non-violation” complaints.
96 Procedures adopted November 1, 1956, Basic Instruments and Selected Documents, 5th
Supplement, 25.
92
30
Transfer of technology to LDCs
requires regular renewal by the Ministerial Conference if granted for a period of
more than one year97 .
The main characteristics and some implications of the three above-examined
proposed solutions are presented in Table 1.
Table 1
The main proposed solutions in comparison
Option
(a) To amend
Article 31 (f) to
carve out an
exception for
exports under CL,
or to remove
limitations on
export entirely.
Steps to achieve
a. Agreement to
reopen TRIPS
and approval of
amendment
b. Changes in
national laws
c. Grant of CL
Conditions98
a. Criteria to
ensure importing
countries face
serious public
health problems
b. Safeguards
against reexportation of
CL product
c. Reporting of
action to trading
partners
Considerations
* Requires
granting of two
CLs
* Requires
compensation in
exporting and
importing
countries
* Changes in
CL legislation in
importing
countries may
be required
Considerations
*Would require
exporting
country to asses
“capacity” of
importing
country
*Subject to
pressures both
in importing
and exporting
* Granting of
licence case-bycase
(b) To interpret
limited exceptions
clause of Article 30
to allow
production for
export to countries
with no or
inefficient
manufacturing
capacity
a. Authoritative
interpretation
(¾ vote)
b. Change in
national laws of
exporting
countries
c. Change in CL
legislation in
importing
countries may be
required
a. Entirety of the
product must be
exported to
countries with
the public health
problem
b. Prohibition of
re-export.
*Export country
not required to
do a case-bycase decision
*No amendment
of TRIPS needed
*Compensation
payable only in
importing
country
*Any party can
invoke the
exception, at
any time, in
exporting
country
(c) Moratorium on
WTO complaints/
disputes
Ministerial
Conference/
Amendment
Criteria to be
established
*Not a solution,
as such, since it
is only
temporary
*The criteria
could be
disputable even
if mechanism is
not
CL= compulsory licence.
97
98
See Article IX. 3 and 4 of the Agreement
According to proposals by the USA and the EC and their Member States.
31
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
As indicated in the precedent Table, an Article 30-based solution would be more
straightforward than one based on Article 31 (f). Some Members may fear that an
authoritative interpretation of Article 30 might spill over into unforeseen categories
of intellectual property, particularly copyright, because of the existence of a similar
exceptions provision. However, appropriate wording may be adopted in order to
avoid an unintended reading of such an interpretation.
Safeguards
If developed countries agreed to any of these solutions, they are likely to demand the
establishment of certain “safeguards”, as indicated in the submissions by the USA
and the EC and their Member States to the Council for TRIPS of March 2002. Such
safeguards would aim at ensuring that any agreed solution is not utilized to attain
objectives other than those related to the protection of public health in the countries
with no or insufficient manufacturing capacity for the economically viable
production of pharmaceuticals.
A basic safeguard would be the provision of mechanisms to prevent the diversion of
products exported to a country qualifying under paragraph 6 to other countries99 ,
and that the entire output of the relevant pharmaceuticals manufactured be exported
to the Member in need. The notification to other Members of actions taken has also
been mentioned100 .
Compulsory licence in the importing country
In order to import a patented product, the country in need may apply the
international exhaustion principle and allow parallel imports or grant a compulsory
licence either to import or to manufacture the protected product. The understanding
given by the Members to paragraph 6 in some of the proposals mentioned above,
clearly implies that a compulsory licence can be satisfied by imports, and not only by
local production101 .
However, it may be excessive (due to complexity and costs) to impose the burden of
monitoring and preventing such a diversion on the importing country in need of
pharmaceuticals. The European Commission has noted that “the industry acknowledges that
to date there is no reimportation of medicines from the poorest developing countries into the
EU, i.e. the problem of reimportation is still largely theoretical” (European Commission, 2002,
p. 10). In addition, restrictions on the export of products may violate Article XI of GATT
(prohibitions or restrictions on the importation or exportation of products).
100 See IP/C/W/340. One additional question might be if, in order to be validated under a
paragraph 6 exception, certain pricing conditions would be attached to the exported
products.
101 Some national laws require, however, the compulsory licencee to locally produce the
invention. Unless amended, such legislation can make illusory a solution under paragraph 6
based on either Article 31 (f) or Article 30, since in both cases the assumption is that the
compulsory licencee is able to import in order to execute his licence.
99
32
Transfer of technology to LDCs
A review of the patent laws of seventy developing countries and LDCs (Table 2)
indicates that the majority provide for compulsory licences in case of failure to
exploit or to do it on reasonable terms – in line with Article 5A of the Paris
Convention – while only 13 provide for grounds relating to public interest and/or
national emergency or health emergency.
Table 2
Grounds for compulsory licences in developing countries and LDCs
Grounds for granting
compulsory licences
Countries providing such
grounds
Total
Failure to exploit or exploit on
reasonable terms
Public interest
16 + OAPI
32
8 + Andean
13
National emergency or health
emergency
8 + Andean
13
Remedy anti-competitive
practices, unfair competition
6 + Andean
11
Failure to obtain licence under
reasonable terms
Failure to work domestically
4
4
2
2
No apparent provisions
2
2
Source: Thorpe, 2002.
Though more detailed research on national laws is required, this information
suggests that in order to make operative any solution under paragraph 6, many
developing countries and LDCs would need to amend their national patent laws.
Economic feasibility
For any possible solution under paragraph 6 to work, it is crucial that the designed
legal framework provide the adequate incentives for the production and export of
the medicines in need. Overcoming the normative obstacles to exports would not
mean much if no firms were interested in supplying the required pharmaceuticals at
a low cost.
Generic companies operate today as suppliers of off-patent medicines, and have not
generally used the compulsory licence system to get access to patented products.
Their main interest lies in the rapid introduction of products after patent expiry,
relying – where available – on “Bolar” type exceptions. In case a need emerges in a
country under paragraph 6, a generic company would need to develop and
implement a method for the production, on viable economic terms, of the active
ingredient. In addition, a suitable formulation would need to be developed and
33
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
approval obtained in the importing country. Offering the required drug would
require considerable investment and time. A premise of paragraph 6 is that the drugs
would have to be supplied at low cost, making the realization of economies of scale an
essential condition for the implementation of any acceptable solution.
In the already mentioned EC-Canada case, Canada argued that
“Both the brand name and generic pharmaceutical industries were global in nature.
Very few countries had fully integrated brand name or generic drug industries
within their borders. Even in large countries, generic producers frequently had to
obtain ingredients such as fine chemicals from producers in other countries. Many
countries had no generic industries at all and had to obtain generic (as well as brand
name) products from other countries. Smaller countries that did have generic
industries did not have domestic markets sufficiently large to enable those industries
to operate on an economic scale. Those industries had to export in order to be able to
manufacture in sufficient quantities to achieve economies of scale, so that domestic
consumers could receive the benefits of cost-effective generic products”
(para. 4.38 (a).
If individual countries with small markets look for supplies under a solution
(whatever it is) under paragraph 6, generic companies may lack sufficient incentives
to incur the necessary costs of development and marketing of a low cost version of
the patented drug. A good diplomatic solution to the problem posed by paragraph 6,
therefore, may not necessarily provide effective relief to the countries in need. An
option to address this problem would be for several countries to pool their buying
power of certain drugs, in order to allow potential suppliers to realize economies of
scale (Engelberg, 2002). The time at which a request under paragraph 6 is made may
also make a difference. Generic companies may be more inclined to satisfy requests
when the relevant patent is about to expire (and therefore investments made may be
soon recovered in other markets) than in cases where the patent will still be valid for
a long period.
The economic feasibility of supply may be also depend on the importing country's
regime for protection of data submitted for marketing approval. If the local
regulation strictly follows Article 39.3102 of the TRIPS Agreement and provides
protection against unfair commercial use of such data, but not an exclusivity period,
the registration of the generic product may be relatively simple and
straightforward103 . However, if a TRIPS-plus approach is adopted, and the
registration of subsequent products is banned until a period of exclusivity expires –
as is the case in the USA and Europe – the entry of the generic product may be
delayed or frustrated. Generic companies may not be willing to make the substantial
investment needed to duplicate the tests necessary to prove efficacy and safety.
Legal implementation
Changes in the TRIPS Agreement, or new interpretations, do not translate
automatically into changes in national laws. Therefore, any solution found at the
See on this issue, Correa, 2002.
Depending also on the kind of studies required to prove the “similarity” of the product
with the original one, such as bioequivalence and bioavailability tests.
102
103
34
Transfer of technology to LDCs
Council for TRIPS is likely to call for amendments to national laws in potential
exporting countries in order to become operative. All potentially exporting countries,
including developed countries, should appropriately amend national law to facilitate
effective implementation of the Council for TRIPS solution to the paragraph 6
problem.
The implementation of an effective solution under paragraph 6 may also depend on
the conditions under which compulsory licences are granted in the importing
country. The remuneration to be paid to the patent holder should be such that it does
not nullify the aim of the licence, to ensure the supply of low cost pharmaceuticals. In
addition, national governments should carefully implement Article 31 (g)104 of the
TRIPS Agreement, in a manner that does not undermine the incentives to apply for
and execute a compulsory licence105 .
TRIPS Article 31 (g): “[The] authorization for such use shall be liable, subject to adequate
protection of the legitimate interests of the persons so authorized, to be terminated if and
when the circumstances which led to it cease to exist and are unlikely to recur. The competent
authority shall have the authority to review, upon motivated request, the continued existence
of these circumstances”.
105 This also applies, of course, to a possible solution under Article 31 (f).
104
35
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Transfer of technology to LDCs
Doha Declaration on TRIPS and Public Health: Paragraph 7
We reaffirm the commitment of developed-country members to provide incentives to
their enterprises and institutions to promote and encourage technology transfer to
least-developed country members pursuant to Article 66.2. We also agree that the
least-developed country members will not be obliged, with respect to pharmaceutical
products, to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement
or to enforce rights provided for under these Sections until 1 January 2016, without
prejudice to the right of least-developed country members to seek other extensions of
the transition periods as provided for in Article 66.1 of the TRIPS Agreement. We
instruct the Council for TRIPS to take the necessary action to give effect to this
pursuant to Article 66.1 of the TRIPS Agreement.
Paragraph 7 of the Doha Declaration reaffirmed
“the commitment of developed-country Members to provide incentives to their
enterprises and institutions to promote and encourage technology transfer to leastdeveloped country Members pursuant to Article 66.2.”
LDCs have repeatedly raised concerns at the Council for TRIPS about the lack of
effective action by developed countries to comply with Article 66.2 of the TRIPS
Agreement106 .
Though some developed countries provide different forms of technical assistance on
IPR-related issues, LDCs have repeatedly noted that no or little action has been taken
by developed countries to specifically implement their obligations under Article 66.2.
It remains to be seen whether the reaffirmation in the Doha Declaration of such
obligations has a practical impact on developed countries’ actions in this area.
Also note that paragraph 11.2 of the Implementation Decision adopted on 14 November
2001 states the following: “Reaffirming that the provisions of Article 66.2 of the TRIPS
Agreement are mandatory, it is agreed that the TRIPS Council shall put in place a mechanism
for ensuring the monitoring and full implementation of the obligations in question. To this
end, developed-country members shall submit prior to the end of 2002 detailed reports on the
functioning in practice of the incentives provided to their enterprises for the transfer of
technology in pursuance of their commitments under Article 66.2. These submissions shall be
subject to a review in the TRIPS Council and information shall be updated by Members
annually”. For information on home country measures encouraging transfer of technology,
see IP/C/W/132, Add. 1-7.
106
36
Transfer of technology to LDCs
Though the wording in paragraph 7 is broad, its inclusion in the Doha Declaration
indicates that effective incentives should be granted in developed countries in order
to specifically foster the transfer to LDCs of health-related technologies, including
pharmaceutical technologies.
37
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Extension of transitional period for LDCs
The Doha Declaration permits LDCs to opt for an extension of the transitional period
provided for under Article 66.1 of the TRIPS Agreement. Paragraph 7 establishes the
grounds for an extension of the transitional period for LDCs107 in relation to
pharmaceutical patents only. It contains a “duly motivated request” – in the terms of
Article 66.1 of the TRIPS Agreement108 – on the basis of which the Council for TRIPS
must give effect to that extension. LDCs do not need to individually follow the
procedure provided for under Article 66.1 to enjoy this period. The Declaration,
however, explicitly preserves the right of LDCs to request extensions for other
matters (not related to pharmaceutical patents) in accordance with Article 66.1's
procedure109 , without diminishing their right to request further extensions for
pharmaceutical patents after 2016.
This extension applies to “pharmaceutical products”. However, the protection
conferred to a patented process encompasses, according to Article 28.1 (b) of the
TRIPS Agreement, the protection of the products directly obtained with such process.
Hence, the extension of the transitional period should also be deemed to apply to
process patents110 . Likewise, extension would apply to cases involving a second
indication of a pharmaceutical product, since claims are generally drafted in these
cases as product claims on the basis of the “Swiss-claims” formulation111 .
The extension of the transitional period applies in relation to Sections 5 (patents) and
7 (undisclosed information) of Part II of the TRIPS Agreement, and to the
enforcement of such rights.
Though this paragraph does not amend Article 66.1 of the Agreement, it does innovate
with regard to the procedure applicable for the extension of the transitional period for LDCs.
108 TRIPS Article 66.1. “In view of the special needs and requirements of least-developed
country Members, their economic, financial and administrative constraints, and their need for
flexibility to create a viable technological base, such Members shall not be required to apply
the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from
the date of application as defined under paragraph 1 of Article 65. The Council for TRIPS
shall, upon duly motivated request by a least-developed country Member, accord extensions
of this period”.
109 In fact, it would have seem more logical to extend the transitional period for all fields of
technology since, unless individual extensions are accorded, LDCs would be required
anyway to bear the costs of granting patents in other sectors.
110 This is also the interpretation of the European Commission, who held that “all least
developed Members benefit from the extension of the transition period from 1.1. 2006 to
1.1.2016 (and probably beyond) with regard to product and process patent protection and its
enforcement” (European Commission, 2001, p. 4). Also note that the USA delegation, while
submitting their proposal for paragraph 7 at the Doha Ministerial Conference did not refer to
product patent protection only: “We recommend granting the least-developed countries a 10year extension to 2016, to come into full compliance with pharmaceutical-related patent
obligations under TRIPS” (emphasis added). See also Vandoren, 2002, p. 10.
111 See Correa (2000c).
107
38
Extension of transitional period for LDCs
An important practical aspect is to determine which are the LDCs that can effectively
benefit from paragraph 7 of the Doha Declaration. Out of thirty African LDCs, only
two112 do not currently grant patents for pharmaceuticals113 . These would be, in
principle, the only African LDCs that can benefit from this paragraph, unless they
amend their legislation.
Twelve out of the 34 African LDCs are members of the Organisation Africaine de la
Propriété Intellectuelle (OAPI) and 10 of the African Regional Industrial Property
Organization (ARIPO).
Table 3 indicates that 12 out of the 16 members of OAPI are LDCs. Figure 1 illustrates
the patents granted by OAPI over a year period from 1984 to 1996. Also indicated is
the proportion of these patents relating to pharmaceuticals114 . Figure 1 shows the
increase of the number of patents granted in such fields since 1991.
Table 3
Current membership of OAPI
Benin
Chad
Gabon
Mauritania
Burkina Faso
Congo
Guinea
Niger
Cameroon
Côte d’Ivoire
Guinea Bissau
Senegal
Central African Republic
Equatorial Guinea
Mali
Togo
[Countries in italics are United Nations designated Least Developed Countries (LDCs)]
There are 10 LDCs among ARIPO's members (see Table 4). Figure 2 illustrates
the patents granted by ARIPO from 1985 to 1999115 .
Table 4
Current Membership of ARIPO
Botswana
Lesotho
Somalia
Uganda
Gambia
Malawi
Sudan
Zambia
Ghana
Mozambique
Swaziland
Zimbabwe
Kenya
Sierra Leone
United Republic of Tanzania
[Countries in italics are United Nations designated Least Developed Countries (LDCs)]
Angola and Eritrea. See Thorpe, 2002 forthcoming.
The majority of non-African LDCs also seem to confer patent protection for pharmaceutical
products, due to the application of their ex-metropolis’ legislation (personal communication
from WIPO).
114 The data include patents classified under IPC classification mark A61K (preparations for
medical, dental, or toilet purposes) or having a corresponding patent filed elsewhere
classified under mark A61K. Since medicinal-related inventions can also be classified under
other marks, the figures shown should only be taken to represent the bottom end of possible
medicinal-related patents.
115 Also indicated is the proportion of these patents classified under IPC classification mark
A61K (preparations for medical, dental, or toilet purposes) or having a corresponding patent
filed elsewhere classified under mark A61K.
112
113
39
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Figure 1 Patents Granted by OAPI
450
400
350
300
250
Total
A61K Class.
200
150
100
50
0
84
85
86
87
88
89
90
91
92
93
94
95
Year
Figure 2 Patents Granted by ARIPO
140
120
100
80
Total
A61K Class.
60
40
20
0
85
86
87
88
89
90
91
92
Year
40
93
94
95
96
97
98
99
Extension of transitional period for LDCs
LDCs that already grant pharmaceutical patents could, however, amend their
legislation and not grant product patents until 2016116 , since they are not constrained
by the "freezing clause" of Article 65.5 of the TRIPS Agreement.
Another crucial point is whether LDCs will be obliged to grant exclusive marketing
rights (EMRs) under Article 70.9 of the TRIPS Agreement during the extended
transitional period117 . Paragraph 7 does not explicitly exclude the application of that
provision. If LDCs were bound to grant EMRs118 , the value of the concession made by
the Doha Declaration to LDCs would be very limited, since access to medicines and
other products could be effectively blocked for at least five years.
An alternative interpretation for paragraph 7 is possible. Since EMRs do not
constitute a category of intellectual property rights (as enumerated in Article 1.2 of
the TRIPS Agreement), the granting of such rights only provides one way of enforcing
foreign patent rights. As mentioned, paragraph 7 exempts LDCs from the
enforcement of rights provided for in accordance with the patents section of the
TRIPS Agreement. Under this interpretation, LDCs would be exempted from
compliance with Article 70.9.
In addition, in relation to those LDCs that did grant patent protection for
pharmaceutical products as of the entry into force of the WTO Agreement 119 , the
chapeau of Article 70.8 of the TRIPS Agreement makes it clear that the mailbox
obligation applies to members that did “not make available as of the date of entry
into force of the WTO Agreement patent protection for pharmaceutical and
agricultural chemical products.” Article 70.8, literally interpreted, means that those
LDCs who granted such a protection would not be subject to the obligation to grant
exclusive marketing rights.
Such a change, where possible, is likely to raise some complex legal issues under the
relevant national laws, including of a constitutional nature. In the case of the LDCs members
of OAPI, the use of the additional traditional period would require the amendment of the
Libreville Agreement of 1962 (amended in 1977 and 1999). The OAPI establishes a uniform
law and a centralized system of examination and registration. In contrast, the African
Industrial Property Organization (ARIPO), provides for a centralized system of examination
and registration, but it does not establish a common regional law and all designated States are
given a chance to refuse an application before granting by the Regional Office. See, e.g.,
Chirambo, 2002.
117 TRIPS Article 70.9. “Where a product is the subject of a patent application in a Member in
accordance with paragraph 8(a), exclusive marketing rights shall be granted, notwithstanding
the provisions of Part VI, for a period of five years after obtaining marketing approval in that
Member or until a product patent is granted or rejected in that Member, whichever period is
shorter, provided that, subsequent to the entry into force of the WTO Agreement, a patent
application has been filed and a patent granted for that product in another Member and
marketing approval obtained in such other Member”.
118 Article 70.8 makes it clear that its application (and that of Article 70.9 which provides for
EMRs) proceeds “notwithstanding the provisions of Part IV” which includes Article 66.1.
119 January 1, 1995.
116
41
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Special treatment under TRIPS
The non-discrimination clause contained in Article 27.1 of the TRIPS Agreement120
has often been mentioned as preventing any differentiation under patent law in the
treatment of various products or sectors. This interpretation would suggest that any
solution under paragraph 6 would likely violate Article 27.1's non-discrimination
clause.
However, as stated by the panel in the EC-Canada case121 Article 27.1 prohibits
“discrimination,” as opposed to “differentiation”. The panel held that:
“Article 27 prohibits only discrimination as the place of invention, the field of
technology, and whether products are imported or produced locally. Article
27 does not prohibit bona fide exceptions to deal with problems that may exist
only in certain product areas. Moreover, to the extent the prohibition of
discrimination does limit the ability to target certain products in dealing with
certain of the important national policies referred to in Articles 7 and 8.1, that
fact may well constitute a deliberate limitation rather than frustration of
purpose” (para 7.92)122 .
It is implicit within the Doha Declaration that differentiation in patent rules may be
necessary to protect public health. The singling out of public health, and in particular
pharmaceuticals (paragraphs 6 and 7), as an issue needing special attention in TRIPS
implementation constitutes recognition that public health-related patents deserve to
be treated differently from other patents.
The French patent law provides an interesting example of a patent law that
differentiates the treatment of pharmaceutical products on public health grounds. It
provides that:
“Where the interest of public health demand, patents granted for medicines or
for processes for obtaining medicines, for products necessary in obtaining
such medicines or for processes for manufacturing such products may be
subject to ex officio licences in accordance with Article L. 613-16 in the event
of such medicines being made available to the public in insufficient quantity
or quality or at (abnormally high prices) by order of the Minister responsible
for industrial property at the request of the Minister responsible for health.123
TRIPS Article 27.1 “Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and
paragraph 3 of this Article, patents shall be available and patent rights enjoyable without
discrimination as to the place of invention, the field of technology and whether products are
imported or locally produced”.
121 WT/DS114/R, 17 March 2000.
122 The USA also held in the same case, based on the panel report on Section 337, that
“differential treatment was not necessarily treatment that was inconsistent with TRIPS
requirements” (para. 5.36 (b)(3)(ii), WT/DS114/R).
*123 Article L. 613-16.
120
42
Special treatment under TRIPS
Moreover, public health is not a “field of technology”, but a problem area that may
be addressed with products originating in different technological fields, such as
equipment, software, diagnostic kits, medicines, and a large variety of devices used
for medical treatment.
43
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Legal status of the Doha Declaration
The Doha Declaration is a strong political statement that can make it easier for
developing countries to adopt measures necessary to ensure access to health care
without the fear of being dragged into a legal battle124 . The Declaration is also a
Ministerial decision125 with legal effects on the Member States and on the WTO
bodies, particularly the Dispute Settlement Body and the Council for TRIPS126 . It
states the purpose of the TRIPS Agreement in the area of public health, interprets the
TRIPS Agreement with regard to some important aspects, instructs the Council for
TRIPS to take action, and decides on the implementation of the transitional provisions
for LDCs.
A “declaration” has no specific legal status in the framework of WTO law127 ; it is not
strictly an authoritative interpretation in terms of Article IX.2 of the Marrakesh
Agreement Establishing the WTO. However, given the content and mode of
approval of the Doha Declaration, it can be argued that it has the same effects as an
authoritative interpretation. In particular, in providing an agreed understanding on
certain aspects of the TRIPS Agreement in paragraph 5, Members have created a
binding precedent for future panels and Appellate Body reports. According to the
European Commission,
“in the case of disputes (e.g. in the context of WTO dispute settlement
procedures) Members can avail themselves of the comfort provided by this
Declaration. Panelists are likely to take account of the provisions of the TRIPS
Agreement themselves as well as of this complementary Declaration, which,
although it was not meant to affect Members’ rights and obligations, expresses
See e.g. Weisbrot, 2002, p. 16; Raja, 2001, p. 14.
See article IX.1 of the WTO Agreement.
126 It should be noted that the Ministerial Conference rejected proposed language (“Desiring to
clarify the provisions of the TRIPS Agreement, while preserving the rights and obligations of Members
under the Agreement”) that would have suggested that the Declaration would only clarify
provisions of the TRIPS Agreement.
127 The WTO adopted several “declarations” prior to the document examined here:
“Declaration on the Contribution of The World Trade Organization to Achieving Greater
Coherence In Global Economic Policymaking”; “Declaration on the Relationship of the World
Trade Organization with the International Monetary Fund”; “Declaration on the Dispute
Settlement Pursuant to the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 or Part V of the Agreement on Subsidies and
Countervailing Measures”.
124
125
44
Legal status of the Doha Declaration
the Members’ views and intentions. Hence, the Declaration is part of the context
of the TRIPS Agreement, which, according to the rules of treaty interpretation,
has to be taken into account when interpreting the Agreement”128 .
Moreover, the Declaration can be regarded as a “subsequent agreement” between the
parties regarding the interpretation of a treaty or the application of its provisions,
under Article 31.3 (a) of the Vienna Convention on the Law of the Treaties.
Any WTO Member could bring a complaint under the DSU on issues covered by the
Doha Declaration129 , and it would be theoretically possible for a panel or the
Appellate Body to find an inconsistency between the Doha Declaration and the
TRIPS Agreement itself. This is unlikely, however, since in adopting the Declaration,
Members have exercised their exclusive competence to interpret a WTO
agreement130 , and it would be extremely difficult to challenge the adopted
interpretation.
It should be stressed, however, as mentioned above, that the Doha Declaration is not
self-executing and both developed and developing countries should adopt the legal
amendments necessary to implement it. Developing countries, in particular, should
ensure that they are using to the full extent possible the flexibilities allowed by the
TRIPS Agreement to protect public health and facilitate access to health care by all.
European Commission, 2001, p. 2. Se also Vandoren (2002), who notes that “the
Declaration provides comfort to Members in the case of disputes…A Member whose
legislation is being challenged by another Member because of alleged incompatibility with
the TRIPS Agreement can refer to the contents of this Declaration in support of the measures
under dispute, where relevant…and panelists are likely to take account of this
complementary Declaration as well as the provisions of the TRIPS Agreement in their
decisions” (p. 8).
129 See Gillespie-White, 2001.
130 Panels and the Appellate Body can only “clarify” the provisions of the WTO agreements;
they “cannot add or diminish the rights and obligations provided in the covered agreements”
(article 3.2 of the Dispute Settlement Understanding).
128
45
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Issues not covered in the Declaration
The Doha Declaration does not cover all the areas where flexibility of the TRIPS
Agreement exists, such as the exceptions to patent rights (Article 30) and the
protection of data submitted for the registration of pharmaceutical (and
agrochemical) products (Article 39.3). Nor does it refer to the room left to Members
to determine the patentability standards in ways that prevent patenting strategies
aiming at expanding or temporally extending the protection conferred in the
pharmaceutical field131 .
Proposals made in the pre-Doha negotiation phase by different Members included,
inter alia, language on the need to prevent diversion of drugs sold at discounted
prices in developing countries to high-income markets132 , and to ensure that data
protection requirements of Article 39.3 do not become a barrier to the registration
and introduction of generic drugs and the use of compulsory licensing133 . The USA
proposed a five year moratorium on dispute settlement action in relation to “nonviolation” complaints, which was limited to sub-Saharan African countries134 .
See, e.g., Correa, 2001.
The EC regretted that this issue was not dealt with by the Conference (European
Commission, 2001, p. 6).
133 See IP/C/W/296.
134 Acceptance of this proposal would have implied that Article 64 of the TRIPS Agreement on
“non-violation” complaints could be immediately applied to any other Member, something
that most Members rejected since the scope and modalities of such complaints have not been
determined yet by the Ministerial Conference.
131
132
46
Issues not covered in the Declaration
47
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Conclusions
The Doha Declaration addresses real and urgent problems faced by many developing
countries in the area of public health. It is not intended to amend the TRIPS
Agreement in any substantial manner. Rather, it aims to clarify the relationship
between the TRIPS Agreement and Public Health policies of Member countries, and
confirm the rights that Members have retained under the Agreement, particularly by
defining the flexibility allowed in certain key areas.
The Declaration addresses most of the concerns of developing countries on the issue
of public health. The ambiguous wording used in some paragraphs – particularly in
paragraph 4 – was the obvious price paid to build a consensus for the adoption of
the Declaration. Despite such wording, the Declaration makes it clear that a conflict
may exist between TRIPS standards and public health, and has reaffirmed the right
of Members, particularly developing countries, to take measures necessary to protect
public health. The Declaration has set the ground for a differentiation of intellectual
property policies when necessary to protect health.
Though an important political document, the Doha Declaration also has legal effects,
equivalent to those of an authoritative interpretation under WTO rules.
As the mandate given in paragraphs 6 and 7 illustrates, the Doha Declaration
represents, rather than the end of a process, the initial step for rethinking the TRIPS
Agreement in light of the public interest.
Paragraph 6 aims at addressing a problem created by the extension of patent
protection for pharmaceutical products to all WTO Members, irrespective of their
level of development and of their pharmaceutical manufacturing capacity. While
many different legal approaches may be developed, an effective solution must create
the right economic conditions for countries with no or insufficient manufacturing
capacity to obtain pharmaceutical products at low cost. Likewise, the TRIPS
Agreement will continue to create tensions in the public health area, if the case of
countries where no patent protection exists is not also a part of viable legal and
economic solution.
All WTO Members should, in due time, take the steps, as necessary, to implement
the Doha Declaration. Amendments to national laws should be introduced in order
to facilitate exports of needed pharmaceuticals under paragraph 6 of the Declaration.
Developing countries should be encouraged (and the relevant technical assistance
provided) to review their legislation in order to ensure that the flexibilities, as
clarified in the Declaration, as well as other flexibilities allowed by the TRIPS
Agreement, are incorporated in national laws and effectively used to address public
health concerns.
48
Conclusions
The situation of LDCs received special attention at the Doha Conference, but the
paragraph 7 action item did not represent any significant improvement for the great
majority of them. Hence, the problems faced by LDCs to gain access to needed
pharmaceuticals are likely to require further consideration by the WTO Members, in
order to accomplish the objectives sought by the Doha Declaration.
49
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Annex 1
Doha Declaration on the TRIPS
Agreement and Public Health
WORLD TRADE
ORGANIZATION
WT/MIN(01)/DEC/W/2
14 November 2001
(01-5770)
MINISTERIAL CONFERENCE
Fourth Session
Doha, 9 - 14 November 2001
DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH
Adopted on 14 November 2001
1.
We recognize the gravity of the public health problems afflicting many
developing and least-developed countries, especially those resulting from
HIV/AIDS, tuberculosis, malaria and other epidemics.
2.
We stress the need for the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and
international action to address these problems.
3.
We recognize that intellectual property protection is important for the
development of new medicines. We also recognize the concerns about its effects on
prices.
4.
We agree that the TRIPS Agreement does not and should not prevent
Members from taking measures to protect public health. Accordingly, while
reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement
can and should be interpreted and implemented in a manner supportive of WTO
Members' right to protect public health and, in particular, to promote access to
medicines for all.
In this connection, we reaffirm the right of WTO Members to use, to the full,
the provisions in the TRIPS Agreement, which provide flexibility for this purpose.
5.
Accordingly and in the light of paragraph 4 above, while maintaining our
commitments in the TRIPS Agreement, we recognize that these flexibilities include:
50
Annex 2
(a)
(b)
(c)
(d)
In applying the customary rules of interpretation of public
international law, each provision of the TRIPS Agreement shall be
read in the light of the object and purpose of the Agreement as
expressed, in particular, in its objectives and principles.
Each Member has the right to grant compulsory licences and the
freedom to determine the grounds upon which such licences are
granted.
Each Member has the right to determine what constitutes a national
emergency or other circumstances of extreme urgency, it being
understood that public health crises, including those relating to
HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a
national emergency or other circumstances of extreme urgency.
The effect of the provisions in the TRIPS Agreement that are relevant
to the exhaustion of intellectual property rights is to leave each
Member free to establish its own regime for such exhaustion without
challenge, subject to the MFN and national treatment provisions of
Articles 3 and 4.
6.
We recognize that WTO Members with insufficient or no manufacturing
capacities in the pharmaceutical sector could face difficulties in making effective use
of compulsory licensing under the TRIPS Agreement. We instruct the Council for
TRIPS to find an expeditious solution to this problem and to report to the General
Council before the end of 2002.
7.
We reaffirm the commitment of developed-country Members to provide
incentives to their enterprises and institutions to promote and encourage technology
transfer to least-developed country Members pursuant to Article 66.2. We also agree
that the least-developed country Members will not be obliged, with respect to
pharmaceutical products, to implement or apply Sections 5 and 7 of Part II of the
TRIPS Agreement or to enforce rights provided for under these Sections until 1
January 2016, without prejudice to the right of least-developed country Members to
seek other extensions of the transition periods as provided for in Article 66.1 of the
TRIPS Agreement. We instruct the Council for TRIPS to take the necessary action to
give effect to this pursuant to Article 66.1 of the TRIPS Agreement.
_________
51
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
Annex 2
Levels of development of pharmaceutical
industry, by country
Sophisticated
Pharmaceutical
Industry and
Research Base
Innovative
Capabilities
Belgium
France
Germany
Italy
Japan
Netherlands
Sweden
Switzerland
United
Kingdom
United States
Argentina
Australia
Austria
Canada
China
Denmark
Finland
Hungary
India
Ireland
Israel
Mexico
Portugal
Republic of
Korea
Spain
USSR
Yugoslavia
52
Reproductive
Capabilities –
Active
Ingredients and
Finished
Products
Bahamas
Bolivia
Brazil
Bulgaria
Cuba
Czechoslovakia
Egypt
Indonesia
Macau, China
Norway
Poland
Puerto Rico
Romania
Turkey
Reproductive
Capabilities Finished Products
from Imported
Ingredients only
Afghanistan
Albania
Algeria
Angola
Bangladesh
Barbados
Belize
Benin
Brunei
Cambodia
Cameroon
Cape Verde
Chile
Colombia
Costa Rica
Côte d'Ivoire
Cyprus
Democratic People's
Republic of Korea
Dominican Republic
Ecuador
El Salvador
Ethiopia
Fiji
Gambia
Ghana
Greece
Guatemala
Guyana
Haiti
Honduras
Hong Kong, China
Iran (Islamic Republic
of)
Iraq
Jamaica
Jordan
Kenya
Kiribati
Kuwait
Lebanon
Lesotho
No Pharmaceutical
Industry
Andorra
Antigua and Barbuda
Aruba
Bahrain
Bermuda
Bhutan
Botswana
British Virgin Islands
Burkina Faso
Burundi
Central African
Republic
Chad
Comoros
Congo
Cook Islands
Djibouti
Dominica
Equatorial Guinea
Faeroe Islands
French Guyana
French Polynesia
Gabon
Greenland
Grenada
Guadeloupe
Guam
Guinea
Guinea-Bissau
Iceland
Laos
Libyan Arab Jamah.
Liechtenstein
Luxembourg
Maldives
Martinique
Mauritania
Mayotte
Micronesia
Nauru
Annex 2
Sophisticated
Pharmaceutical
Industry and
Research Base
Innovative
Capabilities
Reproductive
Capabilities –
Active
Ingredients and
Finished
Products
Source: Ballance et al, 1992.
Reproductive
Capabilities Finished Products
from Imported
Ingredients only
Liberia
Madagascar
Malawi
Malaysia
Mali
Malta
Mauritius
Mongolia
Morocco
Mozambique
Myanmar
Namibia
Nepal
New Zealand
Nicaragua
Niger
Nigeria
Pakistan
Panama
Papua New Guinea
Paraguay
Peru
Philippines
Saudi Arabia
Seychelles
Sierra Leone
Singapore
Solomon Islands
Somalia
South Africa
Sri Lanka
Sudan
Syrian Arab Republic
Chinese Taipei
Thailand
Tonga
Trinidad and Tobago
Tunisia
Uganda
United Arab Emirates
United Republic of
Tanzania
Uruguay
Venezuela
Viet Nam
Yemen
Zaire
Zambia
Zanzibar
Zimbabwe
No Pharmaceutical
Industry
Netherland Antilles
New Caledonia
Niue
Oman
Qatar
Reunion
Rwanda
St. Kitts and Nevis
St. Lucia
St. Vincent-Grenadines
Samoa
San Marino
Sao Tome and Principe
Senegal
Suriname
Swaziland
Togo
Tuvalu
US Virgin Island
Vanuatu
Western Samoa
53
Implications of the Doha Declaration on the TRIPS Agreement and Public Health
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